Accumulate Prince Pipes and Fittings; target of Rs 816: Prabhudas Lilladher

Prabhudas Lilladher recommended accumulate rating on Prince Pipes and Fittings with a target price of Rs 816 in its research report dated August 11, 2023.

Broker Research

August 16, 2023 / 21:06 IST

Accumulate

26 Aug, 2025 12:21

Volume

Todays L/H

Prabhudas Lilladher's research report on Prince Pipes and Fittings

PRINCPIP reported EBITDA/kg of Rs 12.2/kg, but after excluding inventory loss (Rs100mn) & one time bathware launch expenses of Rs 20mn, EBITDA/kg stood at Rs ~15.4/kg, which is still considered healthy despite performance being materially disrupted. We believe performance should further improve with focus on increasing capacity utilization, premiumisation and better FCF generation. We estimate FY23-25E Sales/EBITDA/PAT CAGR of 13.3%/41.6%/60.9%, with volume CAGR of 17.3% and EBITDA margin of 14.4% in FY25E. Maintain ‘Accumulate’.

Outlook

Prince Pipes and Fittings (PRINCPIP) has maintained its healthy volume growth guidance of higher double digit in FY24 and expects 13-15% margin in the near term given 1) healthy volume growth, 2) product mix towards VAP and 3) business stabilization post ERP implementation. We have maintained our FY25E earnings and increased target multiple to 29x (at 5yrs avg. PE, earlier 25x) with TP of Rs 816 (earlier Rs 718). However, after factoring Q1FY24 numbers we downward revise our FY24 earnings estimate by 14.7%.

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