Motilal Oswal's research report on Prince Pipes and Fittings
Prince Pipes and Fittings (PRINCPIP) reported a muted quarter amid the ongoing challenges of volatile pricing and the early onset of monsoon, affecting demand. The company reported a marginal decline in revenue YoY due to lower realization (down 7% YoY), with volume growth of only 4% YoY to 43.7k MT. Its EBITDA margin contracted 280bp YoY to 6.8%, mainly hit by inventory losses (INR100-150m). Management anticipates a gradual recovery in the demand scenario in 9MFY26, which will lead to a high single-to-low double-digit volume growth (Jul’25 witnessed a healthy volume growth). This will result in a sequential recovery in margins to 12% by 4QFY26 (normalized levels), fueled by operating leverage and absence of inventory losses.
Outlook
We expect PRINCPIP to clock 14%/37%/71% CAGR in revenue/EBITDA/PAT over FY25-28. We value the stock at 30x FY27 EPS to arrive at our TP of INR440. Reiterate BUY.
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