Prince pipes Q4 concall –
Q4 outcomes –
Revenues at 764 vs 901 cr YoY
Volumes at 44.3k MT vs 45.3k MT
EBITDA at 148 vs 140 cr, Margins at 19.4 pc vs 15.6 pc (significant improvement)
PAT at 94 vs 88 cr
FY 23 outcomes –
Revenues at 2711 vs 2657 cr
Volumes at 157k MT vs 139k MT (up 13 pc)
EBITDA at 250 vs 415 cr
PAT at 121 vs 250 cr
Short term debt reduced from 150 to 58 cr
Inventory days at 58 vs 85 days
Working capital days at 57 vs 68 days
FY 23 performance adversely affected by steep fall in RM prices in H1 causing inventory losses
To launch One Fit and Wire Fit products in piping division to bring global technology to India
Aiming to add 35k MT capacity in Bihar(Greenfield)
Bathware launch planned in End of Q1
Company migrating to ERP from legacy systems. May have some adverse impact in Q1
Current number of production facilities – 07, Warehouses – 09, SKUs – 7200
Capex towards Bihar expansion to be around 80 cr. To commence production by Q4 of FY 25. Plus around 70 cr of maint capex
Uptick in RE industry is strong
Q1-Q3 saw significant sale losses due inventory de-stocking due RM price cuts
Q4 saw an inventory gain of apron 25 cr
Demand continues to be extremely strong in Q1 across Agri and RE sector
Channel inventory is low due strong end demand
Previously commissioned plant at Telangana operating at 40 pc
Storage water tanks sales in FY 23 @ 30 cr. Intend to double it in FY 24
CPVC is a key focus area for the company specially after the flow guard ( Lubrizol ) tie-up
Jal Se Nal is a decent revenue contributor
Company doesn’t sell directly to the Govt. Sells it through local distributors to avoid credit risk
Jal Se Nal scheme is likely to continue for foreseeable future
Ex of Q1, expect 10-12 pc volume growth in FY 24
RE (building materials) is the main focus area for the company
Agri segment helps absorb fixed costs
Advertisement expenses for FY 23 @ 42 cr
90 pc of cost for changing over to ERP system already baked in FY 23 numbers
Company procures CPVC from Lubrizol and PVC from RIL and Chemplast Sunmar in addition to imports ( in case of PVC )
Expect 14-15 pc EBITDA margins over long term
Most inventory gains/losses should even out over 4 Qtrs barring wild fluctuations in RM prices that company saw in FY 22, 23
Inventory loss in FY 23 was 125 cr
CPVC prices have also cooled off
Local players and Lubrizol increasing CPVC capacities in India – long term positive
This will make CPVC more affordable and help the top 4 players
Infra demand comprises aprox 10-12 pc of Industry today
Expecting 15-20 pc 2-3 yr CAGR volume growth going fwd
Company has early mover advantage in East India
Company’s CPVC mkt share is around 10 pc which contributes 25 pc of company’s revenues. Overall Mkt share is around 7 pc
Disc: holding
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