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We are optimistic about Prince Pipes and Fittings Ltd. after our interaction with management and continue to believe that it will benefit from the growing demand for pipes, although the demand environment remains tepid in the near term.
Management stressed that demand for plumbing pipes remains strong in the current quarter (excluding the impact of Covid-19 in early January), but demand for agricultural products has yet to pick up. The company is optimistic about demand from the agri segment (~25-30% of sales) from the third week of March.
Management indicated that margins may remain subdued in the near term due to the high cost of polyvinyl chloride inventory carried over from Q3 and only partial pass-through of increased CPVC costs in the current quarter (Q4 FY22).
Despite short-term hiccups, Prince Pipes management expects to achieve volume growth of 10-15% in the medium term.
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This post Prince Pipes – Bright Outlook; Short-term headwinds likely: ICICI effects
was original published at “https://www.bloombergquint.com/research-reports/prince-pipes-bright-outlook-near-term-headwinds-likely-icici-securities”