Agencies Securities has buy call on Prince Pipes & Fittings Ltd. with a target price of Rs 750. The current market price of & Fittings is Rs 608. Time period given by analyst is one year when Prince Pipes & Fittings Ltd. price can reach defined target.
Prince Pipes & Fittings Ltd., incorporated in the year 1987, is a Small Cap company (having a market cap of Rs 7022.84 Crore) operating in Plastics sector.
Prince Pipes & Fittings Ltd. key Products/Revenue Segments include Pipes & Fittings, Scrap, Contract Revenue, Other Operating Revenue and Duty Drawback for the year ending 31-Mar-2021.
Financials
For the quarter ended 30-06-2022, the company reported a Standalone Total Income of Rs 605.32 Crore, down -32.84 % from last quarter Total Income of Rs 901.30 Crore and up 81.89 % from last year same quarter Total Income of Rs 332.80 Crore. Company reported net profit after tax of Rs 16.03 Crore in latest quarter.
Investment Rationale
The brokerage maintains BUY rating on Prince Pipes with a revised target price of INR 750/sh (18.5x its Mar-24E EBITDA). In Q1FY23, Prince reported weak volume and margin, missing our estimates. Dealer destocking amid continued resin price decline in Q1 led to a 31% QoQ volume decline in the quarter. Op-lev loss and sharp inventory loss (INR 300-350mn) further pulled down unitary EBITDA by 55% QoQ to INR 14/kg. However, on a four-year CAGR basis, it still managed to deliver growth of 2/9% volume/EBITDA. It continues to like Prince for its large product portfolio, robust pan-India distribution, and low exposure (~30-35%) to price sensitive agri/rural markets.
Promoter/FII Holdings
Promoters held 62.94 per cent stake in the company as of 30-Jun-2022, while FIIs owned 4.15 per cent, DIIs 14.51 per cent.
Prince Pipes & Fittings Ltd., incorporated in the year 1987, is a Small Cap company (having a market cap of Rs 7022.84 Crore) operating in Plastics sector.
Prince Pipes & Fittings Ltd. key Products/Revenue Segments include Pipes & Fittings, Scrap, Contract Revenue, Other Operating Revenue and Duty Drawback for the year ending 31-Mar-2021.
Financials
For the quarter ended 30-06-2022, the company reported a Standalone Total Income of Rs 605.32 Crore, down -32.84 % from last quarter Total Income of Rs 901.30 Crore and up 81.89 % from last year same quarter Total Income of Rs 332.80 Crore. Company reported net profit after tax of Rs 16.03 Crore in latest quarter.
Investment Rationale
The brokerage maintains BUY rating on Prince Pipes with a revised target price of INR 750/sh (18.5x its Mar-24E EBITDA). In Q1FY23, Prince reported weak volume and margin, missing our estimates. Dealer destocking amid continued resin price decline in Q1 led to a 31% QoQ volume decline in the quarter. Op-lev loss and sharp inventory loss (INR 300-350mn) further pulled down unitary EBITDA by 55% QoQ to INR 14/kg. However, on a four-year CAGR basis, it still managed to deliver growth of 2/9% volume/EBITDA. It continues to like Prince for its large product portfolio, robust pan-India distribution, and low exposure (~30-35%) to price sensitive agri/rural markets.
Promoter/FII Holdings
Promoters held 62.94 per cent stake in the company as of 30-Jun-2022, while FIIs owned 4.15 per cent, DIIs 14.51 per cent.
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