Prince Pipes

Prince Pipes reported a challenging Q3 FY26, with revenue from operations at INR573 crores and a net loss of INR2 crores after exceptional item^📎s. This performance was significantly impacted by an INR18-20 crores inventory loss and subdued demand across key applications including plumbing, agriculture, and infrastructure. Despite these headwinds, the company managed a 3% YoY volume growth, reaching 42,575 metric tons, indicating underlying operational resilience.

For the first nine months of FY26, Prince Pipes recorded revenue of INR1,748 crores, with a 2% YoY volume growth to 1,29,071 metric tons. EBITDA for the period stood at INR122 crores, marking a 12% YoY growth, with a margin of 7%. Profit after tax (after exceptional item^📎s) for the nine months was INR17 crores, reflecting the difficult Q3 performance.

The company demonstrated strong improvements in working capital management, reducing overall working capital days to 66 days for 9M FY26, down from 90 days in the prior year. Receivables days improved to 49 days (from 53 days), and inventory days decreased to 76 days (from 102 days). Management aims to further optimize receivables to mid-40s within the next six months and achieve overall working capital days of 60-65 in the longer run through strategies like increased domestic sourcing and aggressive channel finance.

Prince Pipes successfully transitioned to in-house compounding for its CPVC products, launching the SmartFit Plus brand. This strategic move resulted in a 6-7% cost benefit, which was passed on to the channel, driving high double-digit volume growth in the CPVC segment during Q3. The company emphasizes innovation and portfolio diversification into value-added products to strengthen its plumbing solutions presence and drive volume growth.

The company's capex for 9M FY26 was INR160 crores, with an estimated total FY26 capex of INR225-230 crores. This includes INR40-45 crores for the acquisition and debottlenecking of an Aquel bathware manufacturing unit. For FY27, maintenance and replacement capex is projected at INR70-75 crores. Current capacity utilization stands at 50-52%, and management plans to consider further capacity additions only when utilization reaches approximately 65%, leveraging existing land banks in strategic locations like Jaipur, Telangana, and Bihar.

Management is optimistic about a gradual recovery in demand, supported by restocking activities and stabilizing PVC pricing trends, with prices now expected to be range-bound around INR70 per kg. They anticipate double-digit volume growth for Q4 FY26 and FY27, with a conservative target of 8-10% for FY27. The company targets an EBITDA margin of 10-12% (excluding bathware losses) for the upcoming year, driven by improved product mix, decentralization benefits, and operating leverage.

The bathware segment reported INR13 crores in revenue for Q3 FY26 and incurred a loss of INR18 crores for 9M FY26 (approximately INR6 crores per quarter). The breakeven target for this segment has been revised from Q2 FY27 to Q3/Q4 FY27, aiming for INR25-30 crores in quarterly revenue. This revision accounts for the lag effect of recent expansions in South and East India, where teams are now in place to drive revenue.