Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  
Google
Web www.equitybulls.com
Research

| More

Prince Pipes and Fittings - Beat on all counts - Q4FY21 Result - ICICI Securities

Posted On: 2021-05-16 06:40:08 (Time Zone: UTC)


Prince Pipes and Fittings (PPF) reported an impressive 25.7% YoY volume growth driven by strong growth in its plumbing portfolio. Higher inventory gains (Rs300mn-350mn), operating leverage and superior pricing power led to a sharp beat in its Q4FY21 EBITDA margin at 19.3% (I-Sec: 17.4%), up 590bps YoY and 50bps QoQ. This was achieved despite marked increase in its brand spend, which was higher at 4.5% of sales vs 2-2.5% normal quarter. PPF has guided for 13-14% EBITDA margin with an upward bias on the back of likely operating leverage, superior product mix and logistics cost savings with Telangana facility likely to ramp up production in the near to medium term. Key risks to our estimates: a) sharp cut in PVC prices may impact volumes and margins in the near term, and b) sustained intermittent lockdowns. Maintain BUY.

- Valuation and outlook: Factoring-in the Q4FY21 outperformance, we increase our revenue and PAT estimates by 7%/7.4% and 22.2%/20.8% for FY22E/FY23E respectively. We now expect the company to report volume/revenue and PAT CAGRs of 18.6%/10.2% and 10% respectively, over FY21-FY23E. We maintain BUY on the stock with a revised target price of Rs660 (earlier: Rs505), valuing it at 27x (vs 25x earlier) FY23E earnings due to sustained improvement in the balance sheet and growing visibility in the CPVC pipe segment.

- Higher PVC prices and growth traction in CPVC pipes drive an impressive 25.7% YoY volume growth: PPF posted a strong Q4FY21 volume growth of 25.7% YoY led by higher sales of plumbing (PVC as well as CPVC pipes) and SWR pipes. Higher PVC prices and recent price hikes in CPVC led to a sharp increase in revenues by 76.7% to Rs7.6bn (I-Sec: Rs6.3bn). With the company expected to witness strong growth traction in CPVC pipes led by cross-selling opportunities and focus on increasing the project business along with ramp-up in Telangana capacity, we expect PPF to report 18.6%/10.2% volume/revenue CAGRs over FY21-FY23E.

- EBIDTA margin surprises positively at 19.3% (I-Sec: 17.4%): PPF reported a sharp beat in EBITDA margin at 19.3%, up 590bps/50bps YoY/QoQ. The beat was driven by inventory gains in the PVC pipe segment to the tune of Rs300mn-350mn, sustained brand monetisation in PVC pipes, operating leverage and superior product mix. Going forward, we expect EBITDA margin (adjusted for current inventory gains in PVC pipe segment) to further improve driven by superior product mix, likely price hikes in CPVC pipes and manufacturing footprint expansion over the next two years.

- Sound balance sheet to lead to further rerating: With the company repaying its long-term debt fully, its gross debt is now down to Rs850mn vs Rs2.6bn in Mar'20. Going forward, despite Telangana plant capex, we expect the company to generate strong FCF and deliver >25% RoCEs starting FY23E.


Source: Equity Bulls

Click here to send ur comments or to feedback@equitybulls.com


Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only. www.equitybulls.com, its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. www.equitybulls.com or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.


Other Headlines:

CESC Q4FY21 Results Review Report - Loss decline, strong CF make valuation attractive - HDFC Securities

White Goods & Durables - Analysis of pressure cooker market: TTK Prestige is key beneficiary - ICICI Securities

CESC - Good earnings in a challenging environment - ICICI Securities

Somany Ceramics - Walking the talk - ICICI Securities

DB Corp - Rise in newsprint price adds to risk - ICICI Securities

CEAT - Market share ambitions remain strong - ICICI Securities

Consumer Staples & Discretionary - Worm's world view #32: Conversations with paint dealers regarding price hikes - ICICI Securities

Oil & Gas - Oil, gas & spot LNG surge to bring gains for GAIL & OIL - ICICI Securities

Asset Management Companies - Positive trends to support earnings - ICICI Securities

Q4FY21 Result Update - Lemon Tree Hotels - ICICI Direct

Q4FY21 Company Update - Globus Spirits - ICICI Direct

Q4FY21 Result Update - DB Corp - ICICI Direct

Q4FY21 Result Update - Somany Ceramics - ICICI Direct

KEC International: Company Update - Building on diversification - HDFC Securities

LIC Housing Finance - Q4 FY21 Result Update - YES Securities

Entertainment Network Ltd - Beating on solutions business - ICICI Securities

Asahi India Glass - Operating leverage, product mix aid margins - ICICI Securities

Whirlpool of India - Market leading revenue growth - ICICI Securities

Lemon Tree Hotels - Wait for recovery gets longer - ICICI Securities

LIC Housing Finance - Stupendous growth momentum; needs to shore up provisioning and capital buffer - ICICI Securities

Quant Pick - Bank of Baroda - ICICI Direct

Company Update - Amara Raja Batteries - Investor Event Outcome - ICICI Direct

Q4FY21 Result Update - Bhel - ICICI Direct

Q4FY21 Company Update - NRB Bearings - ICICI Direct

CESC - Q4FY21 First Cut - ICICI Direct

Q4FY21 Result Update - Entertainment Network India - ICICI Direct

LIC Housing Finance Results Review Report - Balance sheet beefs up; P&L to stay soft - HDFC Securities

Jubilant FoodWorks 4QFY21 Results Review Report - Missing excitement; recovery priced in - HDFC Securities

BFSI Sector Update - MFI Consultation Paper Takeaways - Incrementally positive for NBFC-MFIs - HDFC Securities

Q4FY21 Result Update - JK Cement - ICICI Direct

Q4FY21 Result Update - Minda Industries - ICICI Direct

Stock Tales - Indo Count Industries - ICICI Direct

IPO Review - Krishna Institute of Medical Sciences Ltd - ICICI Direct

Q4FY21 Company Update - Greenply Industries - ICICI Direct

IPO Review - Dodla Dairy Ltd - ICICI Direct

Lemon Tree Hotels - Q4FY21 First Cut - ICICI Direct

Jubilant Foodworks - Q4FY21 investor call takeaways - YES Securities

Greenply Industries Ltd - Q4 FY21 Result Update - YES Securities

Whirlpool of India Ltd - Q4 FY21 Result Update - YES Securities

New India Assurance Report - CoRs disappoint yet again - HDFC Securities

Maintain BUY on Kajaria Ceramics - Performance shines through; outlook bright - HDFC Securities

Retain ADD on Deccan Cement - Volume strong; high other expense dents margin - HDFC Securities

Reiterate ADD on NHPC - Lower generation impacts earnings - HDFC Securities

Maintain BUY on JK Cement - Robust volume and utilisation - HDFC Securities

Maintain BUY on DLF - Gaining traction - HDFC Securities

Maintain BUY on Capacite Infraprojects - Marginal miss - HDFC Securities

DLF Ltd - Q4 FY21 Result Update - YES Securities

Greenply Industries Ltd - Q4FY21 first cut - YES Securities

Coal India - Coal makes a comeback - ICICI Securities

Kajaria Ceramics - Q4FY21 beat largely priced in - ICICI Securities


Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2020