Thread by @TYMFinance

Prince Pipes & Fitting conducted Concall today at 11:30 AM for Q121

Here are the conference call highlights.

"Launched new product Prince One Fit Industrial Pipe to replace the Mild Pipe"

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Business Updates:

• Revenue growth of 9% and volume de-growth of 26%. Reduction was
- Covid impact
- Volatility in PVC prices which increased the inventory levels of co.
- Decrease in demand in rural region, espcially in agriculture area.

• June & July month have turned wel

New Product:

• Launched New Prince One Fit Industrial Pipe (PVC pipes)
- It will replace Mild Pipes and.
- Usage in Chemical, Power, Paper & Pulp, Water Treatment.
• 3 Polymer solution for Industrial
• In 2017, Prince was early mover to bring DWC pipe to replace RCC pipes

Industry Updates:

• Smaller players are also suffering and mgmt don't expect small player to take the market.
• Mgmt is bullish on plumbing segment, while agriculture would be visible in the next quarter.
• In Q1 revenue from agri sector has reduced from

Revenue Share:

- 65% from building
- 30% from Agriculture
- 5% from Other Infra

Product Revenue Share:
- PVC- 65-70%
- CPVC- 18-20%
- Balance from other

Co. has not lost market share this quarter. Not make sense to compare Prince Pipe QoQ.

CPVC:

• CPVC pipes is seeing good growth.
• With Flowguard Plus tie-up, margin are improved in the CPVC segment.
• Mgmt expect double digit growth in the CPVC segment.

Margin Profile:

• Inventory loss reduced the margin compared to YoY.
• Co. is focusing on improving the margin with new product launches and through operating leverage.
• Inventory loss reduced the margin compared to YoY.
• Guidance would remain at 13-15% margin.

Raw Material:

• Co. do have domestic contract with both the large manufacturer company.
• RM supply continuous to remain challenge.
• PVC & Resin supply is increasing which will stabilize the price & mgmt expect inventory loss will not be visible in future.

Inventory:

• Inventory levels is high right now.
• PVC trend has started moving upward, as demand is normalizing and supply is tight.
• Inventory loss was around 5%, but this will not increase, as demand from PVC is increasing.

Other Data:

• Finance cost reduced by 50%, with repayment of debt.
• Gross debt reduced to 157cr from 256cr YoY.
• Cost of borrowing of co. has reduced an channel financing progress is on line. ~18-20% of distributor are in channel financing.
• Adv spend would be 2-3%.

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