Prince Pipes Q2 Results Review - Subdued Performance Due To Inventory Loss: Reliance Securities
The company is likely to deliver a healthy volume, led by healthy growth in agri, plumbing segments; improved operating efficiency
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Reliance Securities Report
Prince Pipes and Fittings Ltd. reported lower-than-expected revenue in Q2 FY23 due to subdued volume. Revenue declined by 16% YoY (up 5% QoQ) to Rs 6.4 billion (our estimate of Rs 6.9 billion) due to 10% YoY decline in volume at 38,458 million tonne, while realisation decreased 7% YoY to Rs 166/kg.
The volume was impacted due to continuing channel destocking from the dealers. The company reported first ever Ebitda loss of Rs 113 million, from Ebitda of Rs 1.2 billion in Q2 FY22 and Rs 439 million in Q1 FY23, versus our estimated Ebitda of Rs 543 million, due to higher raw material costs (86.9% of sales versus 72% YoY) and inventory loss.
Prince Pipes reported net loss of Rs 241 million, from profit after tax of Rs 761 million YoY and Rs 160 million QoQ, as against our estimate of Rs 243 million.
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