Prince Pipes and Fittings Limited Q4 and FY '26 Earnings Conference Call

Nature of the Disclosure

This is a transcript of an earnings conference call held with analysts and institutional investors to discuss the company's operational and financial performance for the fourth quarter (Q4) and full financial year (FY26), ended March 31, 2026.

Management Participants

  • Mr. Parag Chheda – Joint Managing Director
  • Mr. Nihar Chheda – Vice President (Strategy)
  • Mr. Anand Gupta – Chief Financial Officer

The call was moderated by Mr. Sumeet Khaitan from MUFG Intime.

Key Financial Figures and Operational Performance

FY26 Full Year Highlights:

  • Revenue from operations stood at ₹2,598 crores, a growth of 3% Year-on-Year (YoY).
  • Volumes for FY26 stood at 191,238 metric tons compared to 177,202 metric tons in the previous year, a growth of 8%.
  • EBITDA for the full year stood at ₹232 crores, up 43% YoY. The EBITDA margin was 9%.
  • The company recorded an exceptional item of ₹2.05 crores (net of tax) towards an estimated increase in provision for employee benefits arising from the implementation of the new Labour Code.
  • Profit After Tax (PAT) after exceptional items stood at ₹73 crores, registering a growth of 70% YoY. The PAT margin was 3%.

Q4 FY26 Highlights:

  • The company achieved its highest ever quarterly volumes.
  • Volume growth for Q4 was 23% YoY.
  • The volume growth was robust across all three months of the quarter (January, February, March).

Working Capital and Balance Sheet:

  • Working capital efficiency improved significantly in FY26.
  • Working capital days stood at 45 days in FY26, compared to 98 days in the corresponding period last year.
  • Receivable days improved to 51 days from 61 days YoY.
  • Inventory days stood at 70 days as of March 31, 2026. The company aims to maintain this in the range of 65-75 days.
  • The company is a debt-free organization with a robust balance sheet.

Strategic Updates and Business Developments

Product Launch:

  • The company launched DECILO, an advanced low-noise PP pipe solution engineered with mineral-filled polypropylene technology. This product is designed for modern infrastructure needs and is expected to enhance the product mix.

Acquisition (M&A):

  • The company successfully completed the second phase of its asset purchase agreement with Klaus Waren Fixtures Limited for the strategic acquisition of the bathware brand, Aquel.
  • The acquisition includes land, building, machinery, manufacturing equipment, and associated infrastructure at Bhuj, Gujarat, which will serve as a dedicated manufacturing base for bathware operations.
  • For Q4 FY26, the bathware segment revenue was ₹16 crores with a loss of ₹5 crores.
  • The company targets a quarterly revenue run rate of ₹20-25 crores to achieve breakeven in the bathware segment, expected in Q2 or Q3 of FY27.

Market Expansion:

  • The company intensified demand generation efforts in underpenetrated markets and added thousands of retailers in the past couple of quarters.
  • A new bathware experience center was inaugurated in Vadodara, Gujarat.
  • The company is focusing on strengthening its presence in the South Indian market.
  • The business mix is approximately 70% retail and 30% projects.

Capacity and Capex:

  • The overall production capacity utilization for FY26 was approximately 52%.
  • The utilization at the new Begusarai (Bihar) plant is around 60%.
  • Capex guidance for FY27 is in the range of ₹200-210 crores. This includes maintenance capex, debottlenecking at 2-3 plants, investments in storage/warehouse infrastructure, and the second tranche for the Bhuj acquisition.
  • The long-term target for gross asset turnover is 2.5x.

Management Commentary and Forward-Looking Guidance

Industry Context: FY26 was a challenging year shaped by volatile raw material prices, extended unseasonal rainfall, subdued demand, and significant fluctuations in PVC prices.

FY27 Guidance:

  • Volume growth is expected to be in the range of 12% to 15%.
  • EBITDA margin is guided to be in the range of 11% to 13% on an annualized basis, including bathware losses. Quarterly margins may vary.
  • The company aims to reduce debtor days by another 10-15 days over the next year from the current level of 51 days.

Strategy: The growth strategy is centered on market consolidation, network expansion (adding distributors and retailers), launching innovative value-added products (like DECILO), and improving the product mix. The value-added product contribution (CPVC, PPR) was 23-24% in FY26 and is targeted to reach 27-28% in FY27.

Raw Material & Pricing: The company stated it had zero inventory gain in Q4 as benefits were passed on to channel partners to drive competitiveness and market share gains. The company maintains a disciplined inventory policy to minimize the impact of raw material volatility on profitability. Pricing for PVC and CPVC products is at par with market leaders on a pan-India average basis.