Latest news with #PrincePipes


Indian Express
7 days ago
- Business
- Indian Express
Stock sinks 50%, profit dives 76%: Can Prince Pipes' Rs 70 Crore Bihar push spark a revival?
In mid-2023, Prince Pipes' stock price touched Rs 740, riding high on hopes of India's booming housing sector, rural water supply push, and its growing brand strength in plumbing solutions. Fast forward twelve months, and the stock now trades near Rs 350, a fall of more than 50%, as the company struggled through one of its most challenging years. In FY25, Prince Pipes reported a 76% decline in profit after tax (PAT), squeezed by sharp volatility in PVC resin prices, unexpected inventory losses, and aggressive dealer incentives that cut deep into margins. Despite a small rise in volumes, revenue dipped, and profitability took a severe knock, shaking investor confidence. But then the company has been expanding capacity, entering new segments like bathware, and doubling down on higher-margin products like CPVC pipes. A major new plant in Bihar, planned capacity scale-up to 60,000 MT, and early traction in its bathware business suggest a longer-term strategy at play. For investors watching these developments, the key question now is not just about past profit decline or stock fall. It is whether the strategic moves can turn Prince Pipes into a stronger, more diversified growth story or if this downturn signals deeper structural headwinds in an intensely competitive market. At its core, Prince Pipes operates in the plastic piping solutions market, serving applications across plumbing, water supply, irrigation, sanitation, and increasingly, interior bathware fittings. The company manufactures and sells pipes and fittings in PVC, CPVC, HDPE, and PPR materials, each with different uses and margin profiles. In FY25, Prince Pipes sold about 1.77 lakh metric tons of products, slightly higher than 1.73 lakh metric tons in FY24, a growth of around 3%. Now, this suggests stable demand despite industry headwinds. However, when you look at numbers, they tell a different story: revenue fell by 2% to Rs 2,524 crore from Rs 2,569 crore last year. Why did the revenue fall? The main reason is lower realisations per ton, meaning the average price at which the company sold each ton dropped. This happened because of: Thus, while Prince Pipes managed to maintain volumes, it came at the cost of lower revenue per ton and weaker margins. PAT also fell sharply by 76% to Rs 43 crore in FY25 from Rs 182 crore in FY24. The EBITDA margin, a key measure of operational profitability, halved to 6% from 12% last year. To understand this, one must look at the gross profit margin, which fell to 25% in FY25 from 29% in FY24. The company booked inventory losses estimated at Rs 90 crore for the year, as high raw material costs previously stocked became unviable to sell at the new lower market prices. These inventory write-downs directly reduced gross profit and, therefore, operating profit. Prince Pipes has a strong focus on PVC pipes, which make up a large part of its sales volume but are generally lower margin compared to CPVC products. In FY25, the company saw double-digit growth in CPVC volumes, which is encouraging because CPVC pipes have higher average realisations and better margins. CPVC is used in hot and cold water plumbing, preferred in residential and commercial buildings for its heat and corrosion resistance. By pushing more CPVC products, Prince aims to improve its margin profile in the long term. Geographic and segment footprint The company has a pan-India presence, supported by eight manufacturing facilities, including its newest plant in Begusarai, Bihar. As of FY25, its network of over 1,500 channel partners helps it reach deep into tier-2 and tier-3 cities, critical markets where modern plumbing and water infrastructure are expanding fast. Besides pipes, Prince is building its bathware business, which contributed Rs 30 crore in FY25 revenue. While still small, this segment can complement the core pipe business by tapping into the same retail and construction channels. According to industry estimates, the domestic pipe industry is projected to grow at around 10-12% CAGR over the next few years. However, this growth is not without challenges. The market has become intensely competitive, with large organised players like Supreme Industries and Astral, as well as a sizeable unorganised segment that competes aggressively on price. This has forced companies like Prince Pipes to balance between protecting margins and maintaining or expanding market share. After a tough FY25, Prince Pipes' management has laid out a cautious but optimistic roadmap. Rather than chasing short-term volume at any cost, the company plans to focus on strengthening its brand, improving product mix, and executing strategic capacity expansions. One of the biggest moves is the expansion at the Begusarai plant in Bihar. The plant started operations in Q4 FY25 with a capacity of 24,000 metric tons. Management aims to scale this up to 60,000 metric tons by the first half of FY26. This facility is strategically important because it will help the company serve east India more effectively, reduce freight costs, and improve service levels in a high-potential market. Besides capacity, management is betting on product diversification, particularly in CPVC pipes and the new bathware segment. CPVC pipes have shown double-digit volume growth even in a difficult year. The bathware business, under the Aquel brand, is still small (Rs 30 crore in FY25 revenue) and loss-making today, but management believes it will reach breakeven in the next four to five quarters. By entering this category, Prince wants to become a one-stop solution provider for builders and households, offering everything from water supply pipes to bathroom fittings. Management also stressed that it will focus on stabilising margins rather than aggressive price cuts. With PVC resin prices bottoming out recently, the company expects a more stable raw material environment in FY26. This should reduce the risk of further inventory losses and help improve gross margins. Management expects double-digit volume growth in FY26, supported by government-led water supply and sanitation programmes, ongoing urban infrastructure expansion, and housing construction recovery. A stable PVC price environment should encourage channel partners to maintain normal inventory levels, unlike the heavy destocking seen last year. Additionally, brand investments such as advertisements and partnerships in high-footfall zones signal Prince Pipes' intention to strengthen consumer recall and trust. The stock has corrected sharply from around Rs 740 in mid-2023 to nearly Rs 350 today. This decline has already priced in much of the near-term pain: inventory losses, margin pressure, and weak short-term growth. At current levels, Prince Pipes trades at an estimated 90 times trailing earnings, which seems high due to the very low FY25 profit base. However, on a forward-looking basis, if the company can deliver its guided double-digit volume growth and gradually recover margins toward its historical average (around 10-12% EBITDA margin), earnings could improve meaningfully over the next two to three years. For example, if Prince Pipes can move closer to Rs 150 crore in PAT over the next two years, the forward price-to-earnings multiple would compress significantly, making the valuation more reasonable. The key is execution: stabilising margins, improving product mix, and successfully ramping up new capacities and bathware business. While the long-term structural demand drivers for pipes and water infrastructure in India remain intact, investors should consider key risks: Raw material price volatility, especially PVC, which could again hurt margins. Intense competition from both large organised players and regional unorganised manufacturers. Execution risk in scaling up new segments like bathware and in achieving breakeven as planned. Economic cycles and government spending trends which can affect construction and housing demand. Overall, Prince Pipes' strategy reflects a long-term focus on becoming a more diversified and resilient company. The expansion into east India, growth in CPVC and bathware, and focus on brand investments all point towards building a stronger business foundation. However, after a year with a 76% drop in profit and continued challenges in demand and margin recovery, this is not a quick turnaround story. Investors considering the stock today must be prepared for near-term volatility and be willing to wait for gradual margin recovery and scale benefits to play out. Note: This article relies on data from annual and industry reports. We have used our assumptions for forecasting. Parth Parikh has over a decade of experience in finance and research and currently heads the growth and content vertical at Finsire. He holds an FRM Charter and an MBA in Finance from Narsee Monjee Institute of Management Studies. Disclosure: The writer and his dependents do not hold the stocks discussed in this article. The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities or other related investments of issuers and/or companies discussed therein. The content of the articles and the interpretation of data are solely the personal views of the contributors/ writers/authors. Investors must make their own investment decisions based on their specific objectives, resources and only after consulting such independent advisors as may be necessary.
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Business Standard
08-07-2025
- Business
- Business Standard
Motilal Oswal sector of the week: Pipes; Astral, Supreme Ind among top bets
The robust demand from the housing, irrigation, and infrastructure sectors is expected to support the robust expansion of the Indian plastic pipes market. The market is anticipated to expand at a 14 per cent compound annual growth rate (CAGR) from ₹541 billion in FY24 to ₹805 billion by FY27, driven by significant government initiatives and ongoing replacement demand. By expanding their capacity and strategically diversifying their business, organised players, who now control over 70 per cent of the market (up from 50 per cent in FY10), are propelling growth. Leading companies like Prince Pipes, Astral, and Supreme Industries are aggressively entering related markets like industrial components, water tanks, and bathware. With a projected compound annual growth rate (CAGR) of 8–12 per cent, these high-growth categories have the potential to increase the total addressable market (TAM) to 3.6 times the size of the core pipes industry. With major manufacturers moving toward value-added products like CPVC, HDPE, and OPVC pipes, margins could improve. Major businesses' aggregate Ebitda margins are expected to rise from around 13.5 per cent in FY25 to about 16 per cent by FY28, driven by rising demand for high-end goods and stable raw material prices. Replacement demand, particularly the move from GI to CPVC/PVC pipes, has maintained a strong growth engine despite previous slowdowns in the real estate market. Between FY20 and FY24, industry revenues increased 1.8 times faster than the rise of residential launches. Strong tailwinds are still provided by policy support. The need for pipes in irrigation, sanitation, and water delivery is increasing as a result of flagship projects like Jal Jeevan Mission, AMRUT, PMAY, and PMKSY. About 40 per cent of pipe demand is due to irrigation alone, as 52 per cent of farmed land is still unirrigated, offering significant headroom. Additionally, new demand pools for HDPE, MDPE, and OPVC pipes are being created by modern applications in infrastructure, smart cities, and city gas distribution. The Indian plastic pipes industry is well-positioned for consistent growth in volumes, sales, and profitability through FY28 because to solid fundamentals, growing TAM, and encouraging policy momentum. Astral – Target price: ₹1,800 The company has solidified its position as a pioneer in India's plastic pipe industry, revolutionising the sector with CPVC pipes in 1998 and expanding into five key segments — Pipes, Water Tanks, Adhesives & Sealants, Bathware, and Paints. With the highest TAM of ₹1,595b in the industry, ASTRA's strategic acquisitions, capacity expansions, and strong exports drive sustained doubledigit growth. Its revenue/Ebitda/Adjusted PAT is estimated to clock a CAGR of 16/17/23 per cent over FY25-FY28, driven by volume growth (12 per cent CAGR). Supreme Industries – Target price: ₹5,400 Supreme Industries is a key player in India's plastic industry, leveraging decades of expertise to build a robust product portfolio across pipes & fittings, bathware, industrial goods, consumer products, and advanced packaging solutions. Operating 25 state-of-the-art plants with a robust 1,091,000 MTPA capacity. Its revenue/Ebitda/ Adjusted PAT is estimated to report a robust CAGR of 14/20/23 per cent over FY25-FY28, driven by healthy volume growth (at 13 per cent CAGR) and improving margin profile.


Time of India
30-06-2025
- Business
- Time of India
Top stocks to buy: Stock recommendations for the week starting June 30, 2025
Top stocks to buy (AI image) Stock market recommendations: According to Motilal Oswal Financial Services Ltd, the top stock picks for the week (starting June 30, 2025) are Federal Bank, and Prince Pipes. Let's take a look: Name CMP Target Upside Federal Bank 209 250 20% Prince Pipes 358 500 40% Federal Bank Federal Bank has demonstrated strong business growth, rebalancing its portfolio toward medium- and high-yielding segments like LAP, used CVs, gold loans & credit cards to drive profitability. We estimate loan growth to sustain at 17% CAGR over FY25-28E, with asset quality remaining robust. Deposit growth is expected to accelerate at 15% CAGR over FY25–28, driven by a CA-led CASA push, a stronger NR franchise, and branch realignment. CASA ratio is expected to rise to 34–35% by FY28E. Asset quality remains strong with GNPA/NNPA at 1.84%/0.44% and Prov. coverage ratio above 75%. Under new CEO Mr. KVS Manian, FB is addressing its gaps and pivoting toward sustainable, return-driven growth across businesses and geographies. We estimate RoA/RoE at 1.4%/15.6% by FY28E, driven by better margins, asset mix shift, and improved cost efficiency. FB is one of our preferred BUY-rated ideas among mid-size private banks. Prince Pipes Prince Pipes is among India's top five plastic piping providers and operates seven plants (398K MTPA by FY25) with 7,200+ SKUs and a 1,500+ distributor network. With ~25% of revenue from CPVC and ~70% from real estate, PRINCPIP is set to benefit from India's growing real estate sector. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like These Are The Most Beautiful Women In The World Undo Further, strategic expansion in East India, premium product launches, and government infrastructure projects further drive growth. Its revenue/EBITDA/Adj. PAT would report a robust CAGR of 15%/38%/73% over FY25-FY28E due to a low base, driven by 12% volume CAGR. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now