Prince Pipes Stock Gains The Most On Record After Q3 Results

Shares of Prince Pipes Ltd. gained the most on record after the company's profit and revenue rose in the third quarter.

The company's revenue rose 39% over the year earlier to Rs 549 crore in the quarter ended December, according to an exchange filing. Its net profit jumped threefold to Rs 66.7 crore.

• Operating profit, or Ebitda, nearly doubled year-on-year to Rs 102.9 crore.
• Operating margin expanded 550 basis points to 18.7%, driven by operating leverage, superior product mix and inventory gains.

The company's sales volumes rose 18% to 36,711 million tonnes during the reported quarter, led by market share gains in PVR pipes and growth traction in CPVC pipes.

“Prince Pipes' Q3 volume growth was the best among peers,” ICICI Securities said in a post-earnings note. “With the company expected to witness strong growth traction in its CPVC pipe segment, coupled with cross-selling opportunities and the recent product launches, we expect volume and revenue CAGR of 11.6% and 12.7% over FY20-23E.”

Prince Pipes, according to an investor presentation, recently commenced commercial production at its seventh manufacturing facility in Telangana. The plant is expected to have a total installed capacity of about 50,000 tonnes per annum, and capacity ramp-up will be implemented in a phased manner over the next two-three years.

ICICI Securities said, “With further margin levers up its sleeve and demand tailwinds likely to sustain, we expect earnings momentum for the stock to gain further traction.”

Shares of Prince Pipes gained as much as 17.7% to Rs 394.1 apiece—also a record high. The stock is up for the fifth straight session, and has gained more than 30% during the period. All the seven analysts tracking the company recommend a ‘buy'. The stock crossed its Bloomberg consensus 12-month price target of Rs 364 on Thursday.