Prince Pipes share price soars 9% after Motilal Oswal reiterates 'buy' rating on demand recovery

Prince Pipes & Fittings, one of the country’s leading integrated piping solutions providers and multi-polymer manufacturers, saw its shares jump 9% in Thursday’s intraday session to reach ₹358 apiece after domestic brokerage firm Motilal Oswal reiterated its ‘buy’ rating on the stock with a target price of ₹440.

The brokerage believes the company is well-placed amid an improving demand environment for domestic pipes, stable PVC prices, and expected ADD-led support, which it expects will drive a gradual rebound from 2QFY26 onwards.

The PVC pipes sector closed the June quarter on a weak note, weighed down by muted demand, adverse macro conditions, and fluctuations in raw material prices. However, the brokerage highlighted that companies remain confident of delivering double-digit volume growth for the year, supported by a strong recovery in July–August 2025.

Most companies reported a healthy pickup in volumes in July 2025, with similar momentum observed in August 2025, indicating a strong finish to FY26. With PVC prices having bottomed out, emerging positives such as the favorable DGTR order on Anti-Dumping Duty (ADD) for PVC Suspension Resins (PVC-S) are expected to support price recovery. This, in turn, the brokerage expects, should encourage channel restocking as current inventory levels remain low.

The DGTR’s final findings on the investigation into PVC-S dumping in India concluded that dumping has adversely impacted the domestic industry. It has recommended imposing ADD for five years on select exporters from seven countries: China PR, Indonesia, Japan, Korea, Taiwan, Thailand, and the US.

With domestic PVC capacity at 1.8mMT versus demand of 4.7mMT, India remains structurally deficit. However, planned expansions of 2.5mMT by CY27 from major conglomerates are expected to gradually substitute imports. Thus, the brokerage notes that pipe manufacturers stand to benefit, as the shift will enhance supply reliability, reduce raw material volatility, lower working capital needs, and protect margins.

Prince Pipes has guided for a demand recovery from 2QFY26, supported by strong volumes in July 2025, with margins expected to improve sequentially and reach 12% by 4QFY26. Its bathware segment is projected to generate ₹500–600 million in revenue, with break-even targeted by mid-FY27.

On the capex front, the company incurred ₹750 million in 1Q and plans to invest ₹1.6–1.7 billion over the next nine months, focusing on capacity addition at Begusarai (Bihar), expansion in bathware (Aquel), and maintenance.

On the branding side, Prince Pipes has partnered with Indian Railways to showcase its brand across Vande Bharat and other premium trains, significantly enhancing visibility and customer engagement, while also strengthening its distribution network and expanding its product portfolio, according to Motilal Oswal.

Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.

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