Prince Pipes and Fittings Limited Q3 FY26 Earnings Call Summary

Summary

Prince Pipes and Fittings Limited - Q3 FY26 Earnings Call Summary Wednesday, February 11, 2026, 11:00 AM IST

Event Participants

Executives 3 Anand Gupta (CFO), Nihar Chheda (VP Strategy), Parag Chheda (Joint MD)

Analysts 10 Aasim (DAM Capital), Arun Baid (ICICI Securities), Karan Gupta (Asit C Mehta), Keshav Lahoti (HDFC Securities), Meet Jain (Motilal Oswal), Praveen Sahay (Prabhudas Lilladher), Priyanshu (Investec), Shravan Shah (Dolat Capital), Shivani Tanna (Dolat Capital), Vignesh Iyer (Sequent Investments)

Financials & KPIs

Geographic & Segment Commentary

• Plumbing & CPVC: CPVC was the fastest-growing segment in Q3 with high double-digit volume growth. This was supported by the launch of the in-house brand “SmartFit Plus” and a 6-7% cost benefit passed to the channel following the move away from the Lubrizol tie-up.
• Agriculture: Contributes ~30-35% of annual revenue but faced Q3 headwinds due to PVC price volatility and destocking. Management expects a strong Q4/Q1 recovery as current PVC prices remain affordable for farmers.
• Bathware (Aquel): Revenue stood at ₹13 crores for Q3 with an EBITDA loss of ₹6 crores. The segment has expanded into South and East India, with a manufacturing unit acquisition (₹40 crore capex) underway to support in-house production.

Company-Specific & Strategic Commentary

• In-house CPVC Compounding: Transitioned to the “SmartFit Plus” brand for CPVC, moving to in-house compounding. This shift provided a 6-7% cost advantage, allowing the company to be more price-competitive and gain market share.
• Manufacturing Footprint: Newly commissioned plants in Bihar (Begusarai) and Telangana are ramping up. These facilities provide freight benefits and faster service, with Bihar exhibiting higher-than-expected utilization in early Q4.
• Brand & Digital Transformation: Launched the “India Ki Pragati Ka Taj” campaign and implemented Distributor Management Systems (DMS) and Sales Force Automation to improve secondary-level productivity.
• Industry Consolidation: Management noted that the price gap between organized and unorganized players has virtually vanished, leading to unorganized players exiting the market as larger brands become more aggressive.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Pricing & Inventory

• Question: What led to the sharp PVC price increase in January? (Sneha Talreja, Nuvama)
• Answer: Driven by China removing export rebates and lower import arrivals. Prices have bottomed out and are now moving toward a more sustainable range-bound environment (Nihar Chheda).
• Question: Impact of inventory losses in Q3? (Meet Jain, Motilal Oswal)
• Answer: Q3 saw an inventory loss of ₹18-20 crores. However, lower inventory levels (76 days) helped mitigate the impact compared to previous cycles (Anand Gupta).

CPVC Strategy

• Question: How has the transition from Lubrizol affected dynamics? (Keshav Lahoti, HDFC Securities)
• Answer: Moving to in-house compounding for SmartFit Plus provided a 6-7% cost benefit. This was passed to the channel to drive high double-digit volume growth in CPVC (Nihar Chheda).

Growth & Capacity

• Question: When will you need the next round of pipe capacity? (Aasim, DAM Capital)
• Answer: Current utilization is ~50-52%. Company will look at major capacity additions only after reaching 65% utilization. Existing land banks in Jaipur, Telangana, and Bihar allow for future expansion without new greenfield sites (Nihar Chheda).

Financials & Subsidy

• Question: Details on the interest subvention in Bihar? (Varun Julasaria, B&K Securities)
• Answer: Recorded ₹6.5 crores in income based on Bihar government policies; cash realization will follow grant procedures (Anand Gupta).

Key Takeaway

Prince Pipes reported a transitional Q3 FY26, with revenue at ₹573 crores and a 5% EBITDA margin, heavily impacted by ₹18-20 crores in inventory losses. Despite industry-wide headwinds, CPVC volumes grew at high double digits, fueled by the strategic shift to the in-house “SmartFit Plus” brand and in-house compounding which lowered costs by 6-7%. The company has significantly lean-ed its balance sheet, reducing inventory from 102 to 76 days and targeting debtor days in the mid-40s. While competitive intensity among large players remains high, management is leveraging its new decentralized manufacturing footprint in Bihar and Telangana to gain market share from unorganized players. Looking ahead, the company expects a strong Q4 recovery and has guided for double-digit volume growth in FY27 with sustainable EBITDA margins of 10-12%, as it focuses on “juicing out” existing assets and reaching bathware breakeven by late 2026.