Prince Pipes And Fittings Q1 FY27 earnings call

Prince Pipes and Fittings Limited reported a revenue from operations of ₹609 crores in Q1 FY27, marking a 5% year-on-year growth. Despite this, volumes degrew by 7% YoY to 40,729 metric tons, primarily due to an 'April washout' caused by raw material price volatility and channel destocking. However, EBITDA saw a significant 93% YoY increase to ₹77 crores, with margins expanding by 600 basis points to 13%. Profit after tax (PAT) also surged by 580% YoY to ₹34 crores, achieving a 6% PAT margin for the quarter.

The PVC resin market experienced significant volatility in Q1 FY27. After a recovery in March, prices corrected sharply from early April following the temporary suspension of import duty until June 2026. This introduced uncertainty, leading to destocking across channel partners. Management noted that the Minimum Import Price (MIP) now acts as a floor for PVC prices, reducing uncertainty and encouraging distributors to maintain regular inventory levels, which is expected to support future growth.

The company remains focused on its long-term strategy built on three pillars: product innovation, distributor network expansion, and retailer network expansion. Product innovation is highlighted by the new polypropylene-based drainage system, DECILO, which is being manufactured at the Haridwar facility and installed in both residential and commercial projects. Network expansion involves identifying white spaces at district and taluka levels, with aggressive additions of new channel partners planned for the September quarter. Digitization efforts, including Distributor Management Systems (DMS) and Sales Force Automation (SFA), are fully in place, enabling direct targeting of retailers and improved sales force productivity.

The significant margin expansion in Q1 FY27 was primarily driven by an improved product mix. The contribution from higher-margin products like CPVC, PPR, and PP increased compared to PVC. Additionally, the segmental mix shifted, with plumbing and drainage contributing more relative to agri, which is typically heavy in Q1. Better realizations and operating leverage, despite lower volumes, also contributed to the improved EBITDA margins.

Working capital days stood at 71 days in Q1 FY27, with receivable days at 40 and inventory days at 100 as of June 30, 2026. Management aims to reduce inventory days back to the guided 65-75 days by the end of the September quarter, citing supply insecurity and lower-than-expected sales as reasons for the current elevated levels. The long-term target for debtor days is 30, to be achieved over the next couple of years through aggressive channel finance and a pull-based demand model enabled by digitization.

The company reiterated its full-year FY27 guidance for volume growth at 12-15% and operating margins (EBITDA) at 11-13%. Management expects the Bathware segment to achieve a revenue run rate of ₹25 crores by Q3 FY27, nearing breakeven. Current capacity utilization is 52-53%, projected to reach around 60% with the targeted growth. The company is confident in achieving industry-leading growth through its strategic initiatives and expects market conditions to normalize.