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HDFC Securities Institutional Equities
We recently met with the Prince Pipes and Fitting Ltd.'s management. The management noted that industry demand has been subdued and decreasing resin prices is leading to dealers' destocking. CPVC resin prices has increased by 1-2% QoQ in Q2, industry has not passed on this to end customer.
Weak volume and falling resin prices can lead to some inventory losses during Q2, thus pulling down margin. Company remained hopeful of demand uptick in H2 FY25. There is possibility of anti-dumping duty being impose on imported PVC resin in near future.
If this happens, resin price will increase, and channel inventory will reach normal levels. Its Bihar pipes plant is on track to start production in January 2025.
In the bathware segment, it will be ramping up sales in south and then in east in H2 FY25.
We maintain an Add rating on Prince with a lower target price of Rs 570/share (30 times Sep-26E EPS).
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