Prince Pipes Q2 highlights –
Revenues up 3 pc to 656 vs 636 cr ( despite drop in RM prices )
Sales volumes up 8 pc @ 41.5k MT vs 38.5k M, YoY
EBITDA at 94 vs (-) 11 cr ( margins @ 14.3 pc )
PAT at 71 vs (-) 24 cr ( includes an exceptional gain of Rs 17 cr )
A&P spends for Q2 @ 15 cr
H1 volume growth at 13 pc
H1 EBITDA at 139 vs 33 cr
Prince Bathware receiving good response from channel partners and customers ( launched in Jun 23 – in North, West )
Current facilities –
Athal – 9.3 k MT
Dadra – 65.6 k MT
Haridwar – 98.9 k MT
Chennai – 43.3 k MT
Kolhapur – 16.1 k MT
Jaipur – 38.9 k MT
Telangana – 56.9 k MT
New Capex in Bihar to come online by end of FY 25
Company maintaining long term Debt free status
Fall in RM prices in Sep-Oct led to some de-stocking in Q2. Prices have improved and is causing re-stocking in Q3
Plan to launch bathware in Eastern India by Q4
RE sector sales remain buoyant – specially in Mid and Premium categories. Unsold inventory @ decadal low. Augurs really well for building materials companies !!!
Company’s volume growth for last 2-3 Qtrs has been lagging wrt peers. Company aims to reverse this trend in next 2-3 Qtrs through a mix of pricing actions and HDPE capacity expansion. HDPE is one segment where company has been a laggard
Q2 did bear branding and employee cost. Revenues from this segment will get reflected from Q3 onwards. Aim to hit Qtly sales of 8cr to begin with
PPR pipes are slowly gaining momentum ( an advanced material even vs CPVC ). Prince is a mkt leader here. PPR manufacturing requires completely separate infra vs CPVC manufacturing
Currently CPVC pipes and fittings for 20-25 pc of company’s revenues
Currently there is an anti-dumping duty on CPVC polymer. Its extension or otherwise is a key monitorable
Piping Industry is growing volumes at around 14-15 pc YoY. Company aims to be at that level of volume growth as soon as possible
HDPE pipes contribute to aprox 3 pc of company’s sales volumes. These are mostly used in Infra projects. This segment has lower margins and higher working capital cycle. HDPE business to pick up Mar 24 onwards
CPVC costs have come down because of fall in PVC prices – also led to some de-stocking in Q2
Company’s overall capacity utilisation currently at about 50 pc. Telangana facility operating @ 50 pc – Gives the company a huge Operating leverage possibility in future !!!
Capex guidance for this FY @ 150-160 cr. Out of this, 70 odd cr has been earmarked for Bihar facility
Lubrizol’s new CPVC plant coming up in FY 25 in India. Prince and Aashirvad likely to remain only 2 licences for Lubrizol in India. Local facility will make CPVC far more affordable and should be a great news for the Industry
Disc: holding, biased, not SEBI registered
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