Prince Pipes Q2 Results Review

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Prince Pipes and Fittings Ltd. had lower-than-expected revenue in Q2 FY23 due to limited volume. Revenue was down 16% YoY (up 5% QoQ) to 6.4 billion rupees (our estimate of 6.9 billion rupees) due to a 10% year-on-year decline volume at 38,458 million tonnes, while realization fell by 7% year-on-year to Rs 166/kg.

Volume was impacted by continued channel destocking at dealerships. The company recorded the first ever Ebitda loss of Rs 113 million, compared to Ebitda of Rs 1.2 billion in Q2 FY22 and Rs 439 million in Q1 FY23, compared to our estimated Ebitda of Rs 543 million, due to higher raw material costs (86.9% of sales vs. 72% YoY) and inventory loss.

Prince Pipes reported a net loss of Rs 241 million, on profit after tax of Rs 761 million year-on-year and Rs 160 million quarter-on-quarter, against our estimate of Rs 243 million.

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