Prabhudas Lilladher recently issued Buy Call on Prince Pipes and Fittings, along with a new Target Price for the company. Now, let’s examine the research reports and explore their overviews.
Prince Pipes and Fittings is a renowned company in the field of manufacturing and supplying pipes and fittings for various applications. It was founded in 1987 by Mr. Prakash Chandraji Choudhary, who envisioned creating a reliable and trusted brand in the industry. The company’s headquarters are located in Mumbai, Maharashtra, India.
Prince Pipes and Fittings cater to a wide range of sectors including plumbing, irrigation, agriculture, and construction. They offer a diverse portfolio of products such as PVC pipes, CPVC pipes, fittings, and accessories.
First of all, let’s take a look at the current share price of Prince Pipes and Fittings. To visualize these changes, we can refer to the Prince Pipes and Fittings Share chart which displays the historical share prices, indicating the ups and downs over time.
Research Report
Prabhudas Lilladher’s- on PRINCEPIPE
We have revised our earnings estimates for FY24 and FY25, considering several factors. Firstly, we have accounted for a healthy volume growth guidance of approximately 12-15% due to the strong performance in the real estate, infrastructure, and agriculture sectors. Secondly, we anticipate a stabilization in raw material prices, which will result in normalized EBITDA margins. The management conservatively expects EBITDA margins to be in the range of 13-15%. Lastly, we have considered the reduction in working capital and a positive cash flow trend.
In the case of Prince Pipes and Fittings (PRINCPIP), the company reported better-than-expected profitability. This was primarily attributed to a rebound in EBITDA margins to normalized levels (+19%), driven by stable input prices and a focus on improving the product mix. The EBITDA per kilogram improved to Rs 33.5/kg, and even after excluding inventory gains, it stood at approximately Rs 29/kg, significantly higher than pre-COVID levels. We anticipate further improvements in PRINCPIP’s performance through increased capacity utilization, product premiumization, and enhanced free cash flow generation. However, Q1FY23 is expected to be soft due to the company’s transition towards a global ERP system.
Based on our analysis, we estimate a Sales/EBITDA/PAT Compound Annual Growth Rate (CAGR) of 12.4%/41.0%/60.1% for the period of FY23-25, with a volume CAGR of 12.2% and an EBITDA margin of 14.5% in FY25E. As a result, we have revised our target price (TP) to Rs 716 (previously Rs 693), based on a 25x FY25E earnings per share (EPS), representing a 10% discount to its historical average price-to-earnings (PE) ratio. We maintain a “BUY” recommendation for this stock.
Prabhudas Lilladher Buy Call: Prince Pipes and Fittings
Prince Pipes and Fittings’ current market price is Rs 610. Recently, Prabhudas Lilladher recently issued Buy Call on Prince Pipes and Fittings with a new Target Price of Rs 716.
| Company | Prince Pipes and Fittings |
|---|---|
| AUTHOR | Prabhudas Lilladher |
| DATE | 28-5-2023 |
| TARGET | Rs 716. |
| Type | Buy |
| Report |
Ownership Structure
Here’s a table summarizing the ownership structure of the company.
- Promoters- 60.94%
- Foreign- 6.24%
- Domestic Institution- 15.75%
- Public & Others- 17.06%
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