In FY25, Prince Pipes Reported a 76% Decline in Profit After Tax (P), Squeezed by Sharp Volatity in PVC Resin Pricks, Unexpected Inventory Losses, And Agied Dealer Despite a small rises in volumes, revenue dipped, and profitability to take a Severre knock, shaking investor confidence.

But then the company has been expanding capacity, Entering New Segment Like Bathware, and Doubling Down on Higher-Margin Products like CPVC pipes. A Major New Plant in Bihar, Planned Capacity Scale-Up to 60,000 mt, and early traction in it Bathware business suggest a longer-frlategy at play.

For investors watching these developments, the key question now is not just about past profit decline or stock fall. It is what the strategic moves can turn prince pipes into a stronger, more diversified growth story or if this downturn signal structural headwinds in an intensely competitive market.

Stock price movements for prince pipes. (Source: Screener.in)

Undertanding prince pipes’ Business and Market Position

At its core, prince pipes operates in the plastic piping solutions market, serving applications acros plumbing, water supply, irrigation, sanitation, and inclusion, interior Bathware fittings.

The Company Manufactures and Sells Pipes and Fittings in PVC, CPVC, HDPE, and PPR Materials, Each With Different Uses and Margin Profils.

Volume Versus Revenue: The real picture

In FY25, Prince Pipes Sold about 1.77 Lakh Metric Tons of Products, Slightly Higher than 1.73 Lakh Metric Tons in Fy24, A growth of Around 3%.

Now, this suggests Stable Demand Despite Industry Headwinds. However, when you look at numbers, they tell a different story: Revenue fell by 2% to Rs 2,524 Crore from Rs 2,569 Crore last year.

Why did the revenue fall? The main reason is lower realisations per ton, meaning the average price at which the company solid each ton dropped. This happened becuse of:

• Steep Correction in PVC Resin Pricks Through Much of FY25, which Reduced Final Product Pricks.
• Aggressive Dealer Discounts and incontives, especially in weaker quarters, to push sales volumes.
• Competitive price pressure, as rival companies also cut prices to protect or gain market share.

Thus, while prince pipes managed to maintain volumes, it came at the cost of lower revenue per ton and weather margins.

Profitability Hit: Numbers That Matter

Pat also fell sharply by 76% to Rs 43 Crore in Fy25 from Rs 182 Crore in Fy24. The Ebitda Margin, A key Measure of Operational Profitability, Halved to 6% from 12% Last Year.

To understand this, one must look at the gross profit margin, which fell to 25% in fy25 from 29% in fy24. The Company Booked Inventory Losses Estimated At Rs 90 Croore for the Year, as High Raw Material Costs Previously Stocked Became Unvised to Sell At The New Lower Market Pricks. This Inventory Write-Downs Directly Reduced Gross Profit and, There, Operating Profit.

Management on Inventory Losses. (Source: Company’s Q4 FY25 Analyst Call)

Product Mix and its Role

Prince pipes have a strong focus on pvc pipes, which make up a large part of its sales volume but are generally low margin compared to CPVC products.

In FY25, The Company Saw Double-Digit Growth in CPVC Volumes, which is encouraging because CPVC pipes have HIGHERAGE Realisations and Better Margins.

CPVC is used in hot and cold water plumbing, preferred in residential and commercial buildings for its heat and corrosion resistance. By pushing more cpvc products, prince aims to improve its margin profile in the long term.

Geographic and Segment Footprint

The Company has a pan-india presence, supported by eight manufacturing facilities, including its newest plant in begin, bihar.

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Besides Pipes, Prince is Building Its Bathware Business, which contributed Rs 30 crore in fy25 revenue. While still small, this segment can complement the core pipe business by tapping into the same retail and construction channels.

Market context

According to Industry Estimates, The Domestic Pipe Industry is Projected to Grow At around 10-12% Cagr Over the Next Few Years.

Howver, this growth is not without challenges. The market has becomeing intensely competitive, with live organized players like supreme industries and astral, as well as a sizeable unorganized segment that competes Agesively on Price.

This has forced companies like prince pipes to Balance Between Protecting Margins and maintaining or expanding market share.

Metric

The way ahead: Management’s plan and the valuation view

After a touch fy25, prince pipes’ management has laid out a cautous but optimistic roadmap. Rather than Chaasing Short-Term Volume at any cost, the company to focus on strengthening its brand, improving product mix, and executing strategic capacity expansions.

One of the biggest moves is the expansion at the begusarai plant in bihar. The Plant Started Operations in Q4 FY25 With a Capacity of 24,000 Metric Tons. Management aims to scale this up to 60,000 metric tons by the first half of FY26. This facility is strategically important because it will help the company Serve East India More effectively, Reduce Freight Costs, and Improve Service Levels in a High-Potential Market.

Besides Capacity, Management is betting on production, particularly in CPVC pipes and the new bathware segment. CPVC pipes have shown double-digit volume growth even in a word year.

The bathware business, under the aquel brand, is still small (Rs 30 croore in fy25 revenue) and lost-making today, but management believes it will reachhen in the new to four. By Entering This Category, Prince Wants to Becom Solution Provider for Builders and Households, offering everything from water pipes to bathroom fittings.

Management also stressed that it will focus on Stabilizing Margins Rather than Agied Price Cuts.

With PVC Resin Pricks Bottoming Out Recently, The Company Expects A More Stable Raw Material Environment in Fy26. This should reduce the risk of further investory losses and help improve gross margins.

Demand Outlook and Industry Context

Management experiments double-digit volume growth in fy26, supported by government-redu Water support and sanitation programs, oning urban infrastructure expansion, and housing construction recovery. A Stable PVC Price Environment Should Encourage Channel Partners to Mainton Normal Inventory Levels, Unlike the Heavy Destocking Seen Last Year.

Additionally, Brand Investments Such as Advertisements and Partnerships in High-Footfall Zones Signal Prince ‘Intent to Strange Consumer Recall and Trust.

Vallation Perspective: Is the stock attractive?

The stock has corrected Sharply from around Rs 740 in mid-2023 to nearly Rs 350 today. This decline has already priced in Much of the near-trm pain: Inventory losses, margin pressure, and weight short-trm growth.

At current levels, prince pipes trades at an estimated 90 times trailing earns, whichms high due to the very low fy25 profit base. However, on a forward-loting basis, if the company can deliver its guided double-digit volume growth and Gradually Recover Margins Toward Its Harture 10-12% EbitDa Margin) Improve Meaningfully Over Next Two to Three Years.

For example, if prince pipes can move closer to Rs 150 Crore in pat over the next two years, the forward price-to-earnings multiple with compress significantly, making the valuation more reasonable. The key is Execution: Stabilizing Margins, Improved Product Mix, and successfully ramping up new capacities and bathware business.

Risks Investors shouldch Watch

While the long-trm structural demand drivers for pipes and water infrastructure in india remain intact, investors should consider key risks:

RAW Material Price Volatility, Especially PVC, Which Could Again Hurt Margins.

Intense Competition from Both Large Organized Players and Regional Unorganized Manufacturers.

Execution risk in scaling up new segments like Bathware and Achieving breakeven as planned.

Economic Cycles and Government spending trends which can affect construction and housing demand.

View of the long-trm

Overall, prince pipes’ strategy reflects a long-trm focus on becoming a more diversified and resilient company. The expansion INTO EAst India, Growth in CPVC and Bathware, and Focus on Brand Investments All Point Towards Building a Stronger Business Foundation.

However, after a year with a 76% drop in profit and continuous challenges in Demand and Margin Recovery, this is not a quick turnaround story. Investors consider the stock today must be prepared for near-trm volatility and be willing to wait for gradual margin recovery and scale benefits to play out.

Note: This Article Relies on Data from Annual and Industry Reports. We have used our assumptions for forecasting.

Partth Parikh has over a decade of experience in finance and research and currently heads the growth and content vertical at find. He holds an frm charter and an MBA in finance from Narse Monjee Institute of Management Studies.

Disclosure: The writer and his dependents do not hold the stocks discussed in this article.

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