Prince Pipes & Fittings Ltd. share price target

Prince Pipes and Fittings (PRINCPIP) reported revenue decline of 16.4% YoY (+5% QoQ; 3-year CAGR of 14%) in Q2FY23 with volumes down 10.2% YoY (3-year CAGR of 3.6%) as dealers de-stocked due to fall in PVC prices.

Prince reported fragile volumes and margins, while the EBITDA and PAT margins saw a sharp decline (410 bps/530 bps and 510 bps/730 bps YoY/QoQ respectively) in Q1FY23.

Prince Pipes and Fittings (PRINCPIP) reported an EBITDA margin decline of 522bps/833bps YoY/QoQ (gross margin contracted by 900bps/651bps YoY/QoQ) due to inventory loss of ~Rs300mn-350mn as PVC prices fell during the quarter.

Prince has been enjoying high valuations since its IPO. We believe it is well-positioned to capture incremental market share and continues to be a strong challenger brand to sector leaders. The margins were a bit shy in FY22 as PVC prices declined, but it will improve steadily in FY23-FY24.

We reiterate our BUY rating on Prince Pipes and Fittings (PRINCPIP) post our interaction with management and continue to believe it will be a beneficiary of growing demand for pipes, though the near-term demand environment remains tepid.

Prince Pipes & Fittings Ltd (PPFL), is one of the leading manufacturers of plastic pipes in India with 5.5% of overall market share. Products are marketed under brand names: Prince Piping Systems and Trubore....

Registered Office:Rukmini Towers, 3rd& 4th Floor, # 3/1, Platform Road, Sheshadripuram, Bangalore - 560 020,...

An established brand among the leading players Prince Pipes and Fittings Ltd, is a leading manufacturer of polymer pipes and fittings in India, offering products for varied applications in plumbing, irrigation, and soil, waste and rain water (SWR) management. The company markets its products under two brand names: Prince Piping Systems; and Trubore. They have more than 30 years' experience in the polymer pipes segment. With six...

them to wholesalers, retailers and plumbers. The products under Trubore are directly sold to 212 wholesalers and retailers. Comprehensive product portfolio across polymers serving diverse end-use applications: Due to its comprehensive product range, it is positioned as an end-to-end polymer piping systems solution provider. It currently manufactures polymer pipes using four different polymers: UPVC; CPVC; PPR; and HDPE, and fittings using three different polymers: UPVC; CPVC; and PPR. The company had 7,167 SKUs as at October 31, 2019...

Company is recognized as one of the leading polymer pipes and fittings manufacturers in India...