Prince Pipes

Prince Pipes reported a challenging Q4 FY25 with revenue at ₹720 crores and EBITDA at ₹55 crores, marking a 41% YoY decline in EBITDA. Full Year FY25 revenue stood at ₹2,524 crores, a 2% YoY degrowth, with EBITDA at ₹162 crores (6.4% margin) and PAT at ₹43 crores (1.7% margin). The company experienced an inventory loss of ₹25 crores in Q4 and ₹85-90 crores for the full year, primarily due to PVC resin price volatility and destocking by channel partners.

A key highlight was the successful commissioning of Phase 1 of the new manufacturing facility in Begusarai, Bihar, adding an initial capacity of 24,000 metric tons per annum. This increases total installed capacity to 3,97,500 metric tons per annum. The remaining capacity at Begusarai, bringing the total to 60,000 MTPA, is expected to be commissioned within the next 6 months. For FY26, the Begusarai facility is projected to contribute 20-25 Kt to volumes, with ideal utilization of 60-70% expected within 2 years.

The Bathware segment, Aquel, recorded ₹10.5 crores in revenue for Q4 and a loss of ₹4.5 crores. For the full year FY25, Aquel's revenue was ₹30 crores, with a loss of ₹17-18 crores. Management aims for the Bathware segment to break even in another 4 to 5 quarters. The company continues to expand its retail footprint, with over 200 touch points across India, and is investing in brand visibility through collaborations like Vande Bharat trains.

The company has reevaluated its inventory strategy, aiming for a 'sweet spot' of 60-70 days of inventory, comprising 30 days of raw material and 30-40 days of finished goods. This strategy is expected to be in place by the September quarter. Management believes PVC prices have bottomed out, with a slight reversal recently, and expects prices to remain stable, reducing negative sentiment and destocking by channel partners.

Prince Pipes focuses on profitable market share growth, leveraging its expanded capacities and brand investments. The company prefers to compete with organized players, noting that 30-35% of the industry remains unorganized. They avoid direct institutional sales due to extended credit cycles, participating instead through channel partners. The company is confident that brand consciousness will increase, leading to consolidation in the industry.

The company plans a total capital expenditure of approximately ₹220 crores for FY26. This includes a spillover of ₹70 crores for the Bihar project, ₹43 crores for the Aquel brand, ₹7-8 crores for a new Bhuj plant, and ₹100 crores for operational maintenance and replacement capex across existing facilities. This capex is aimed at capacity expansion in both Bathware and pipes and fittings in East India.

Management expects double-digit volume growth for FY26, driven by a favorable base, expanded capacities, and affordability in PVC prices. They project the overall piping industry to grow by 5-7% in FY26, with CPVC leading this growth due to improved local capacities and rationalized pricing. The company is not currently evaluating OPVC, focusing instead on new products for retail and private B2B projects, avoiding businesses heavily reliant on government sales.