Stock to buy for long-term: SBI sees big upside in this small-cap stock priced below ₹100

Domestic brokerage house SBI Securities has reiterated its ‘Buy’ rating on Hi-Tech Pipes, assigning a revised target price of ₹138—an upside potential of 43.4 percent from the current market price of ₹96.2. The brokerage said the company delivered a strong performance in the March 2025 quarter and remains well-placed for growth, backed by new capacity additions and a rising share of value-added products.

During the March quarter, Hi-Tech Pipes posted consolidated revenue of ₹733.7 crore, EBITDA of ₹34.9 crore, and profit after tax (PAT) of ₹17.6 crore. SBI Securities said revenue and PAT grew by 7.7 percent and 55.8 percent year-on-year, respectively, while EBITDA declined slightly by 1.2 percent. Sales volumes rose 7.7 percent year-on-year to 2.14 lakh tonnes, driven by strong demand from the infrastructure and construction sectors.

Capacity Expansion to Drive Medium-Term Growth

SBI Securities highlighted that the company’s Sikandrabad and Sanand Phase-2 units are in advanced stages of commissioning and are expected to commence operations in FY26. Trial production at both facilities is likely to begin shortly. Once operational, these units will increase Hi-Tech Pipes’ total manufacturing capacity to 1 million tonnes per annum (MTPA), up from the current 0.75 MTPA.

The brokerage further stated that for FY26 and FY27, it has assumed annual capacity additions of 0.6 MTPA each, which translates into a 23.9 percent compound annual growth rate (CAGR) in volumes. SBI Securities expects EBITDA per tonne to improve from ₹3,297 in FY25 to ₹3,639 in FY26 and ₹3,852 in FY27, aided by the higher contribution from value-added products (VAPs).

Focus on Value-Added Products and Capex Plans

According to SBI Securities, Hi-Tech Pipes is transitioning its portfolio from generic steel pipes to more value-added offerings like solar torque tubes and color-coated roofing sheets. The contribution of VAPs is projected to rise from 36 percent in FY25 to 42 percent in FY26 on a blended basis, thereby enhancing the company’s overall margin profile.

Additionally, SBI Securities pointed out that the company is lining up fresh capital expenditure for FY27, aiming to boost capacity by another 25–30 percent. This includes groundwork at the Sri City project in Chennai and continued development of the Sanand Phase-2 facility. The management’s long-term vision is to scale up to a capacity of 2 MTPA by FY29.

Valuation

At the current market price, the stock trades at a price-to-earnings (P/E) ratio of 18.1x and 12.5x on FY26 and FY27 EPS estimates of ₹5.3 and ₹7.6, respectively. SBI Securities values the stock at 18x FY27 earnings to arrive at the target price of ₹138.

Stock price trend

The smallcap stock lost over 14 percent in the last 1 year. In June so far, the stock has advanced almost 2 percent following a 5.6 percent jump in May. Before that, it was in the red for 8 straight months between September 2024 and April 2025.

Currently it is over 64 percent away from its 52-week high of ₹210.75, hit in September 2024. Meanwhile, it is trading closer to its 52-week low of ₹81.53, hit last month.

In conclusion, SBI Securities believes that Hi-Tech Pipes is well-positioned to benefit from robust demand in the structural steel tubes segment, rising VAP contribution, and ongoing capacity expansion. The brokerage maintained its bullish outlook, highlighting strong long-term growth visibility and an attractive valuation, offering investors a potential 44.2 percent return from current levels.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.