Prince Pipes Q2 Results Review - Volatility In The Prices Impacted Volume Growth: IDBI Capital

IDBI Capital Report

Prince Pipes and Fittings Ltd.’s Q2 FY25 top-line was in-line with our estimates. However, Ebitda and profit after tax was below our forecast. Sales volume was at 43,301 million tonne, higher by 4% YoY and net sales realisation came in Rs 143/Kg, lower by 9% over Q2 FY24.

The management lowered sales volume guidance to be in 8%-10% in FY25E led by volatility in the raw material prices and prolonged monsoons in H1 FY25; however the company maintained Ebitda margin guidance to 12%-13%.

We have marginally cut our top-line estimates for FY25E/FY26E. Prince Pipes’ capacity addition, increased sales from Aquel and healthy demand traction bodes well for the company’s earnings growth in near term. Maintain Hold with a revised target price of Rs 529 (earlier Rs 701), assigning 24 times PER on FY26E.

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