Prince Pipes Up 18% To Hit New High On Strong Q3 Results

On Thursday, shares of Prince Pipes and Fittings jumped 18% to a new high of Rs 394.15 after the company reported a 175% rise in net profit to Rs 67 crore in the December-ended quarter, on the back of higher revenues. In the same period a year ago, the company posted a profit of Rs 24 crore.

Prince Pipes revenue from operations stood at Rs 549 crore for the third quarter of FY 2020-21, up 39% from Rs 396 crore a year ago. Sales volume rose by 18% to 36,711 MT in the December-ended quarter from 36,711 MT a year ago.

EBITDA (earnings before interest, taxes, depreciation, and amortisation) margins improved 526 points to 18.76% from 13.5% in the December 2019 quarter.

The company said the seventh manufacturing facility at Sangareddy, Telangana has commenced production much ahead of schedule. The facility allows the company to expand pan India manufacturing capacity, and make greater in-roads into the Southern region.

Meanwhile, the sharp increase in budgetary allocation for Jal Jeevan Mission program and extended tax sops on affordable housing is viewed as highly positive for companies with high exposure to plumbing pipe segment.

"Higher government budgetary allocation for urban development is expected to drive the plastic pipe demand used for the infrastructure sector. Given the government continued focus to improve farm income and high budgetary allocation for the agriculture sector, we believe that this segment can witness improved demand in FY22," the company said in an investor presentation.