This PVC Pipe Company is invested by two Ace Investors and recently they have increased their stake. It was demerged from Prakash Industries and has good financial stability in its books. In this article, we will look at Prakash Pipes’s businesses, Shareholding patterns, financials, and outlook.
Price Movement
Prakash Pipes Limited’s stock in Friday’s session was trading at Rs. 514.95 per share down by 1.76 percent from the previous closing price of Rs. 524.15. The stock has delivered a return of around 26 percent in the past year and has outperformed the Nifty Index in the same period.
Shareholding Pattern
As of September 2024, the shareholding pattern includes promoters holding a share of 44.41 percent stake in Prakash Pipes, Foreign Institutional Investors (FII) holding around 2.00 percent, Domestic Institutional investors (DII) standing at 0.01 percent, and public holdings standing at 53.58 percent.
Out of the public holdings, Ace Investor Dolly Khanna is invested and holds around 3.79 percent stake increased from 2.91 percent in the June 2024 quarter. Another Ace Investor Mukul Mahavir Agrawal is invested in the company by holding around 2.51 percent stake and being consistent in stake.
Business Segments
As per the recent September 2024 results, the company recognizes its revenue from operations from PVC Pipe and Flexible Packaging.
As of Q2FY25, the revenue from the PVC Pipe and Fittings Segment contributes around 45.11 percent, and Flexible Packaging is around 54.88 percent. The flexible packaging segment is outperforming the PVC Pipe segment. The flexible packaging segment saw a 59 percent year-on-year growth compared to a decline of 11.2 percent in the PVC Pipe segment.
The PVC Pipe segment contributes around 58.3 percent and Flexible Packaging contributes around 41.69 percent to the profit before as of Q2FY25. For Flexible packaging, it’s PBIT grew 526 percent year on year and 29.4 percent quarter on quarter compared to the PVC Pipe segment has declined.
Future Outlook
For the PVC Pipe division, the company said that they expect the demand to further pick up from the current quarter with the easing of the volatility in resin prices and withdrawal of the monsoons. Further, the company expects the increase in government infra spending in the second half of this financial year shall also boost the demand.
For the flexible packaging, the company said that during the recent quarter, the division commissioned Nordmeccanica Supercombi 5000 laminator which is to meet the increasing demand for value-added solutions which include water-based adhesive lamination, HSL coating, foil-to-foil-based lamination and in-register cold seal adhesive. They expect this division to continue utilizing their capacities optimally and work on the value-added products. Opportunities to export remain the focus area and the division has been able to enter new territories.
Financial Performance
Their Q2FY25 results show revenue from operations of Rs. 200 crore which increased by 17 percent year on year, from Rs. 171 crore in Q2FY24 and a 2.43 percent decline from Rs. 205 crore in Q1FY25. Their net profit increased by 4.3 percent year on year, from Rs. 23 crores in Q2FY24 to Rs. 24 crores in Q2FY25. Quarterly, the profits were down by 4 percent from Rs. 25 crore.
The debt-to-equity ratio was 0.08 times increased from 0.03 times in FY23. The RoE in FY24 stood at 27.85 percent improved from 22.84 percent a year ago. However, the RoCE stood at 32.34 percent which has improved from 28.62 percent in FY23.
About the company
Prakash Pipes Limited was established in 2017 after a demerger from Prakash Industries which specializes in manufacturing PVC pipes and fittings and flexible packaging products.
They produce a wide range of pipes for applications in drainage, irrigation, and sanitation. Their business model focuses on quality and innovation by leveraging state-of-the-art manufacturing facilities in Kashipur, Uttarakhand. By diversifying into flexible packaging, Prakash Pipes aims to meet the growing demand in the FMCG and pharmaceutical sectors. The company has built a strong distribution network with over 600 dealers, ensuring a robust market presence across India and expanding into international markets.
Written by Santhosh S
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