Prince Pipes - Demand Trend Improving: ICICI Securities

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .ICICI Securities Report.We interacted with the management of Prince Pipes and Fittings Ltd. and following are the key takeaways: Pipe demand has improved from December as pvc prices have started stabilising post FY-to-date correction of ~35%. The company expects at least double digit volume growth in H2 FY23. It has seen re-stocking from dealers, agri demand showing green shoots (in the brief season during the ongoing quarter) and plumbing demand remaining healthy in Q3 FY23.The company indicated margins will normalise in Q4 FY23 as high-cost inventory will be consumed by Q3 FY23.Inventory days, which went up to 85 in Q4 FY22, will normalise to ~60 by the end of Q3 FY23 and the company plans to maintain these levels going ahead as availability of pvc resin has improved. Prince Pipes targets to grow pipe volume in double-digit over medium term with sustainable margins of ~12-14%. We believe the company has near term demand and margin tailwinds (due to inventory losses subsiding in Q4) as agriculture market (30-35% of company’s revenues) is expected to witness a rebound led by a sharp correction (FY-to-date 35%) in pvc prices..Click on the attachment to read the full report:.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Prince Pipes - Demand Trend Improving: ICICI Securities

Pipe demand has improved from December as pvc prices have started stabilising post FY-to-date correction of ~35%.

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