Prince Pipes shares gain 15%, record 2nd largest single-day rise; here’s why

Prince Pipes & Fittings, India's leading integrated piping solutions provider and multi-polymer manufacturer, witnessed a remarkable surge in its stock price during Wednesday's trading session, driven by the company's strong Q2FY24 performance.

For the September ending quarter (Q2FY24), the company reported a net profit of ₹71 crore, a significant improvement compared to the net loss of ₹24 crore in the same period last year. The company's Q2FY24 results include an exceptional item of a net gain of ₹17.93 crore related to the settlement of the registration of its corporate office at The Ruby, Dadar, Mumbai, based on a valuation report, as per the company's earnings report. 

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Its revenues increased by 3% YoY to reach ₹656 crore, compared to ₹636 crore in Q2FY23. Finished goods volumes saw an 8% YoY increase in Q2FY24, reaching 41,529 MT, compared to 38,458 MT in Q2FY23.

In terms of EBITDA, Q2FY24 showed a significant improvement at ₹94 crore, compared to a loss of ₹11 crore in Q2FY23, while the EBITDA margin expanded to 14.3%.

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In response to the stellar Q2 performance, the stock began today's session with a gap-up at ₹684.80 apiece, compared to the previous closing price of ₹625.30, and strengthened further to reach ₹719.95, up by 15.13%. This marks the second-largest intraday gain for the stock since its listing in 2019.

Prince Pipes & Fittings made its debut on the exchanges in December 2019 at ₹166.6 apiece, against an issue price of ₹178. Since then, it has gradually gained, offering a remarkable 301% return to date. After its listing, the stock delivered a stellar return of 95.61% in CY20 and 134.78% in CY21.

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Prince Pipes & Fittings is engaged in the manufacturing of polymer piping solutions in five types of polymers. Over time, it has emerged as one of the fastest-growing companies in the Indian pipes and fittings industry. The company is marketing its products under two renowned brands, namely, Prince Piping Systems and Trubore Piping Systems.

The Indian PVC pipe market is currently in a strong growth stage. Despite the pandemic, the polymer pipes sector has been performing well in the new normal India.

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Based on a report by CRISIL, polyvinyl chloride (pvc) pipes and fittings manufacturers are set to sustain their momentum with a 13–15% on-year volume growth next fiscal year, driven by higher budgetary allocation for government schemes in water supply, irrigation, housing, and infrastructure.

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For industry players, more than 70% of the demand comes from agriculture, water supply, irrigation, and sewerage and depends, directly or indirectly, on government funding. The remaining demand is from residential plumbing and industrial applications, according to the company's FY23 annual report.

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