HG Infra: HG Infra (HG) reported revenue/EBITDA/APAT at INR 9.1/1.5/0.9bn, ahead of our estimates by 28/30/50%. The order book (OB) stands at INR 61bn (~2.4x FY21 revenue). Over the past few quarters, HG has delivered a strong execution outperformance, strengthened its balance sheet, started winning new orders, and showed strong recovery in NWC days. We believe HG deserves a multiple upgrade, backed by robust growth and solid financial discipline. We increase our P/E target multiple from 10x to 12x, upgrade our FY22/23 EPS by 5.8/6.3%, and roll forward our valuation to Jun-23E. We maintain BUY with an increased SOTP-based TP of INR 702/Sh. Somany Ceramics: We maintain our BUY rating on Somany Ceramics (SOMC) with an unchanged target price of INR 940/share (13x Jun23E consolidated EBITDA). We continue to like SOMC for its strong retail distribution, improving product mix, and tightened working capital. In Q1FY22, pandemic impact pulled down SOMCs tiles volume by 41% QoQ and even bathware revenue halved. Thus, consolidated revenue/EBITDA/APAT fell 41/74/91% QoQ to INR 3,299/231/45mn respectively. In addition to the op-lev loss, soaring fuel prices also hit the margin and profits. ITD Cementation: ITD Cementation (ITD) reported in-line revenue/EBITDA at INR 8.2/0.8bn. However, APAT missed our estimates by 19% on higher-than-expected taxes and lower share of profits from associates/JVs. The order backlog (OB) is robust at INR 120bn (4.4x FY21 revenue), aided by Q1FY22 order wins of INR 16bn. While the lockdown impacted execution to an extent during the quarter, ITD has retained its earlier guidance of 15-20% topline growth for FY22....
Initiate coverage with a BUY rating: Since its IPO in Jan20, Princes stock price has soared 3x, as it continues to enjoy valuation rerating. As we expect a brighter outlook for the company, the valuation rerating should continue, in our view. We initiate coverage on the stock with a BUY rating and a TP of INR 830/share (18.5x its Mar23E EBITDA, implying 31x P/E). We initiate coverage on Prince Pipes (Prince) with a BUY rating and a target price of INR 830/share. We like Prince for its focussed presence in the fast-growing plastic pipes business. The companys comprehensive product portfolio covering plumbing, irrigation, and SWR management and robust pan-India distribution network has helped it ramp up sales from its accelerated capacity expansion. These drove up its solid 10-year revenue/EBITDA/APAT CAGR of 17/28/32%. We expect earnings growth to remain strong and cash conversion to improve further, riding on robust demand, Princes continued expansion/capacity ramp-up and its pan-India franchise.
An established brand among the leading players Prince Pipes and Fittings Ltd, is a leading manufacturer of polymer pipes and fittings in India, offering products for varied applications in plumbing, irrigation, and soil, waste and rain water (SWR) management. The company markets its products under two brand names: Prince Piping Systems; and Trubore. They have more than 30 years experience in the polymer pipes segment. With six...
Prince Pipes and Fittings (PPFL) is engaged in manufacturing polymer pipes and fittings. This includes UPVC, CPVC, PPR and HDPE contributing 71%, 20% 6% and 3% to the topline, respectively. The company has six manufacturing plants and over 1400 distributors across India. With a current value market share of 5% in the plastic piping industry, PPFL aims to increase its manufacturing capacity by 25% to ~3 lakh MT by the end of FY21E. The company reported a revenue CAGR of 12% in FY17-19 led by 11% volume growth in the same period. Further, PPFL plans to increase its...
Company is recognized as one of the leading polymer pipes and fittings manufacturers in India...
them to wholesalers, retailers and plumbers. The products under Trubore are directly sold to 212 wholesalers and retailers. Comprehensive product portfolio across polymers serving diverse end-use applications: Due to its comprehensive product range, it is positioned as an end-to-end polymer piping systems solution provider. It currently manufactures polymer pipes using four different polymers: UPVC; CPVC; PPR; and HDPE, and fittings using three different polymers: UPVC; CPVC; and PPR. The company had 7,167 SKUs as at October 31, 2019...
Prince Pipes and Fittings Ltd IPO Note Issue Open: December 18 December 20, 2019, Price Band: Rs. Rs. 177 178, Issue Size: 28,089,888 eq shares (Fresh issue 14044944 + Offer for sale of 14044944 eq sh)
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