Hariom Pipe Industries Ltd Valuation Shifts to Very Attractive Amid Mixed Market Returns

Valuation Metrics Signal Improved Price Attractiveness

Recent data reveals that Hariom Pipe's price-to-earnings (P/E) ratio stands at 20.45, a figure that positions the stock favourably within its peer group. This P/E is notably lower than some competitors such as Cosmic CRF, which trades at a P/E of 42.03, and Steel Exchange at 30.65, indicating a more reasonable price relative to earnings. The price-to-book value (P/BV) ratio of 2.11 further supports this valuation shift, suggesting that the stock is trading at just over twice its book value, a level considered reasonable in the capital-intensive iron and steel industry.

Enterprise value to EBITDA (EV/EBITDA) at 8.95 also underscores the stock’s relative affordability, especially when compared to Ratnaveer Precis’s 12.76 and Cosmic CRF’s 22.99. This metric is crucial for investors assessing operational profitability relative to enterprise value, and Hariom Pipe’s lower ratio signals better value.

However, the PEG ratio of 4.63 remains elevated, reflecting expectations of slower earnings growth relative to price. This contrasts with peers like Gandhi Spl. Tube, which has a PEG of 0.94, indicating more favourable growth prospects relative to price. Investors should weigh this carefully when considering the stock’s growth potential.

Financial Performance and Returns in Context

Hariom Pipe’s return on capital employed (ROCE) of 13.00% and return on equity (ROE) of 10.33% indicate moderate efficiency in generating profits from capital and equity respectively. These figures are respectable within the iron and steel products sector but do not stand out as exceptional. The absence of a dividend yield also suggests that the company is reinvesting earnings rather than returning cash to shareholders, which may appeal to growth-oriented investors but less so to income seekers.

Examining stock returns relative to the Sensex reveals a mixed picture. Over the past week, Hariom Pipe outperformed the Sensex with a 1.65% gain versus 0.90%. The one-month and year-to-date returns are particularly strong at 13.8% and 10.08% respectively, while the Sensex declined by 2.84% and 3.46% over the same periods. However, the stock has underperformed over the one-year and three-year horizons, with returns of -12.11% and 3.29% compared to the Sensex’s 7.18% and 38.27%. This suggests recent momentum but longer-term challenges.

Comparative Valuation Within the Iron & Steel Products Sector

When benchmarked against peers, Hariom Pipe’s valuation stands out as very attractive. For instance, Beekay Steel Industries trades at a P/E of 11.51 with a very attractive valuation grade, while Gandhi Spl. Tube, despite a lower P/E of 13.34, is considered very expensive due to other factors such as EV/EBIT and PEG ratios. Panchmahal Steel and India Homes are classified as risky due to loss-making status, highlighting Hariom Pipe’s relative stability.

Steel Exchange, another peer with a very attractive valuation, has a higher P/E of 30.65 and EV/EBITDA of 10.31, indicating Hariom Pipe’s more compelling price point. However, Hariom Pipe’s PEG ratio remains a concern, suggesting that while the stock is attractively priced, growth expectations are subdued compared to some competitors.

Market Capitalisation and Recent Grade Downgrade

Hariom Pipe’s market capitalisation grade is rated 4, reflecting a mid-cap status that often entails higher volatility and growth potential compared to large caps. The recent downgrade from Hold to Sell in the Mojo Grade on 15 Dec 2025, with a current Mojo Score of 37.0, signals caution from analysts. This downgrade likely reflects concerns over earnings growth, sector headwinds, or broader market conditions impacting the iron and steel products industry.

Despite this, the valuation grade has improved from attractive to very attractive, indicating that the stock’s price has adjusted downward enough to present a more compelling entry point for value-focused investors. The day’s price change of -2.05% to ₹412.65, off a 52-week high of ₹572.10 and above the 52-week low of ₹301.40, suggests the stock is trading in a mid-range band, offering potential for upside if fundamentals improve.

Investment Outlook and Considerations

Investors analysing Hariom Pipe Industries Ltd should balance the improved valuation attractiveness against the company’s middling growth prospects and recent downgrade in overall rating. The stock’s moderate ROCE and ROE, combined with a high PEG ratio, suggest that while the price is appealing, earnings growth may remain constrained in the near term.

Moreover, the stock’s recent outperformance relative to the Sensex over short-term periods contrasts with underperformance over longer horizons, indicating potential volatility and sector-specific challenges. The iron and steel products sector remains sensitive to global commodity prices, input costs, and demand cycles, factors that could influence Hariom Pipe’s future earnings trajectory.

Given these dynamics, value investors may find the current price levels attractive for a selective position, while growth-oriented investors might prefer to monitor earnings developments and sector trends before committing.

Summary of Key Financial Metrics

Hariom Pipe’s key valuation and financial metrics as of early February 2026 are:

• P/E Ratio: 20.45
• Price to Book Value: 2.11
• EV to EBIT: 12.78
• EV to EBITDA: 8.95
• EV to Capital Employed: 1.66
• EV to Sales: 1.13
• PEG Ratio: 4.63
• ROCE: 13.00%
• ROE: 10.33%
• Mojo Score: 37.0 (Sell)
• Market Cap Grade: 4

These figures collectively illustrate a stock that has become more attractively priced relative to its earnings and book value, but with growth concerns that temper enthusiasm.

Conclusion

Hariom Pipe Industries Ltd’s valuation has shifted favourably, presenting a very attractive price point compared to historical levels and peer averages. However, the downgrade in its overall Mojo Grade to Sell and elevated PEG ratio highlight underlying growth challenges. Investors should carefully weigh the improved valuation against the company’s earnings outlook and sector risks before making investment decisions. The stock’s recent short-term outperformance versus the Sensex offers some optimism, but longer-term returns have lagged, underscoring the need for cautious analysis in this cyclical industry.

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