Table of Contents
PRINCE PIPES SHARE INFORMATION
Incorporated in 1987.
Strategically located 7 manufacturing plants.
Pan India distribution – 1,500+ channel partners.
Amongst top 5 Processors in piping industry.
Comprehensive product portfolio across polymers.
Largest range of SKUs – 7,200+ SKUs.
1,706 Employees.
Strong legacy of more than 3 decades.
Total installed capacity – 2,59,000 MTPA.
Technical collaboration with reputed international players.
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RECENT PRODUCT LAUNCHES
RECENT GLOBAL TIE UPS
PRODUCT PORTFOLIOS
PLUMBING AND INDUSTRIAL SOLUTIONS
SOIL, WASTE & RAINWATER (“SWR”) SOLUTIONS
UNDERGROUND DRAINAGE SOLUTIONS
IRRIGATION SOLUTIONS
CABLE DUCTING SOLUTION & STORAGE SOLUTION
MANAGEMENT DISCUSSION ON GLOBAL ECONOMY
The drastically falling per capita income (90%) due to pandemic has pushed millions into poverty in the Emerging Market and Developing Economies (EMDEs).
Slow cross-border tourism and a subdued outlook for oil prices impacted economies depending on oil and tourism.
In China, the economic recovery had been rapid yet sporadic with consumer services trailing industrial production.
However, effective containment measures, forceful public investment response and liquidity support from the central bank resulted in a positive growth rate.
Weak state capacity and limited fiscal space have made it difficult for authorities to respond decisively to the pandemic.
Government indebtedness increased as Government spending rose to address the health crisis and mitigate the adverse economic impacts.
OUTLOOK OF GLOBAL ECONOMY BY PRINCE PIPES SHARE
Global growth is projected to grow at 4.4% during 2022 (Source: World Economic Outlook).
Advanced economies are projected to recover 3.6% IN 2022.
MANAGEMENT DISCUSSION ON INDIAN ECONOMY
India’s economy was in a deceleration phase even before the COVID-19 pandemic hit the country.
The Reserve Bank of India (RBI) announced various measures to support liquidity, revive exports, and boost credit flow and ease of doing business in a bid to revive the economy from pandemic.
The Finance Ministry announced a ₹20 lakh crore economic stimulus package focusing on boosting manufacturing and strengthening supply chains.
A relief of ₹1.70 lakh crore under the Pradhan Mantri Garib Kalyan Yojana was well-timed to target migrants and casual workers.
The additional allocation of ₹10,000 crore in the latest package for Pradhan Mantri Garib Kalyan Rozgar Yojana would further boost job creation in the rural sector and supplement rural incomes.
Supported by these measures, the economy is expected to rebound, with a strong base effect materialising in FY22.
OUTLOOK OF INDIAN ECONOMY BY PRINCE PIPES SHARE
According to the IMF, the Indian economy is expected to grow 12.5% in FY22.
Growth for FY23 is pegged at 6.3%.
The Government’s Union Budget 2021-22 has set out an ambitious economic plan to boost the country’s infrastructure and re-energise economic growth, which is expected to augur well for the country.
INDUSTRY OVERVIEW BY PRINCE PIPES SHARE
INDIAN PLASTIC PIPES AND FITTINGS MARKET:
Government investments in irrigation, and housing and sanitation, through schemes such as Housing for All, Atal Mission for Rejuvenation and Urban Transformation (AMRUT) aimed at providing basic civic amenities like water supply, sewerage, urban transport, parks as to improve the quality of life; and Pradhan Mantri Krishi Sinchayee Yojana (Prime Minister Agriculture Irrigation Scheme) are key headwinds fuelling the industry.
Consequently, the industry reported a robust growth at a healthy CAGR of 10-12% between FY14 and FY19 %. It is expected to reach over Rs.500 billion by FY 24, at a CAGR of 12-14%.
Among the various types of plastic pipes, CPVC (chlorinated polyvinyl chloride) is expected to be the fastest growing sector, clocking 18% CAGR over FY20 – FY25.
GROWTH DRIVERS FOR THE INDUSTRY
IRRIGATION
About 58% of India’s population depend on agriculture considering it as a primary source of income.
Growth in the agriculture sector would further propel the Indian PVC pipes market.
In agriculture, the irrigation sector is the prime user of PVC pipes, contributing ~47% to total sales. Of India’s 142 million hectares of cultivated land, only 50% is irrigated and about 63% of the irrigated land is dependent on tube wells which in turn are monsoon-dependant.
The Government of India is planning to spend Rs. 50 billion over the next five years for setting up a dedicated Micro Irrigation Fund with NABARD.
The Government has created two dedicated funds – a long-term.
According to CRISIL, investments in irrigation will rise sharply by 8-9% CAGR by FY24 compared with 9-10% CAGR over the past five years (April 1, 2014, to March 31, 2019). Of the total investments in irrigation, construction expenditure is estimated at 75%, which accounts for Rs. 4,882 billion until FY24, compared to Rs. 2,931 billion over the past five years. The rise in construction activity will provide the needed fillip to the pipes and fittings industry.
WATER SUPPLY AND SANITATION (WSS) AND PLUMBING
WSS and plumbing contribute 35-40% to the total PVC pipe market in India. Over the last five years, the Government has invested Rs. 416 billion in WSS led by several schemes such as Nal se Jal, a component of the Jal Jivan Mission, which promises piped drinking water to 14.6 crore rural households by 2024.
The Government has undertaken various programmes to boost infrastructure in urban areas which is listed below. This will lead to a rise in demand for WSS and plumbing, in turn resulting in growth of the PVC pipes sector.
Swachh Bharat Mission.
Atal Mission for Rejuvenation & Urban Transformation (AMRUT).
Smart Cities Mission.
REAL ESTATE
Prime consumers of plastic pipes and fittings is the real estate sector.
Government of India announced relief measures seeing the condition of pandemic.
Flexibility in REITs and tax reliefs boosted market sentiments and the sector today is in a position to recover with homebuyers and investors returning to the market.
The market size of real estate sector will grow till US$ 1 trillion by 2030 from US$ 120 billion in 2017 as per the estimates and will contribute 13% to the country’s GDP by 2025.
GROWTH DRIVERS FOR REAL ESTATE SECTOR:
REITs market to drive investment momentum.
Sustained demand from IT/ITeS occupiers and increased demand from e-commerce, healthcare and FMCG.
Focus on sustainability and wellness.
Increased desire to own a house and renewed interest from NRIs.
FINANCIAL PERFORMANCE
| FINANCIAL KEY METRICS | VALUE |
| MARKET CAPITALIZATION | ₹ 6,474 Cr |
| STOCK P/E | 26.0 |
| INDUSTRY P/E | 29.0 |
| ROE | 21.6 % |
| ROCE | 27.5 % |
| DEBT TO EQUITY RATIO | 0.12 |
Why Are Cpvc Pipes Gaining More Prominence?
Corrosion resistance.
Ease of installation.
Optimum flow rates.
Flame and smoke resistant.
Most suitable for carrying drinking water.
Ideal for home plumbing systems.
BUSINESS STRENGTH OF PRINCE PIPES SHARE
Strategically located manufacturing units.
Diverse product portfolio.
Rich experience of the management.
Robust and growing distribution network.
Strong execution track record.
Resilient performance.
Robust controls and processes, strict audit systems ensure financial health.
Collaborating with global players to remain ahead of industry.
Seeking growth.
Staying ahead of the curve.
Manufacturing excellence.
Manufacturing plants and capacities.
Innovation and Leadership
RISKS AND MITIGATION PLAN
- Sluggish economic activity.
MITIGATION: The increasing Government investment in housing and sanitation, building and construction, and irrigation and schemes such as Housing for All and Smart Cities are expected to provide impetus to the pipes industry. They pose great opportunities for organised players like Prince Pipes share and will allow them to maintain sustainable growth.
- Raw material availability.
MITIGATION: Close coordination with suppliers to avail discounts and reduce the purchasing cost.
- Competition.
MITIGATION: To remain relevant and ahead of their peers, Prince Pipes share strive to reduce their costs of production, transportation and distribution, implement impactful marketing campaigns and improve their operating efficiencies.
- Operational efficiency.
MITIGATION: Combination of people, processes and technology helps Prince Pipes share to optimise business performance.
- Foreign exchange.
MITIGATION: Prince Pipes share enter into a variety of derivative financial instruments such as foreign exchange forward contracts, interest rate swaps and cross-currency swaps to mitigate this risk.