#EBITDA #GROWTH 5 Year CAGR: 10.8%

In FY24, the EBITDA increased by 22.8% YoY to ₹307 cr. Advertising expenses was ₹54 cr in FY24 v/s ₹41 cr in FY23. The rise was on account of decline in cost of materials consumed. The net inventory loss for the year was ~₹15 cr (inventory loss of ₹10 cr in Q1 FY24, gain of ₹5 cr, loss of ~10 cr in Q3 and no loss in Q4 FY24). PVS prices remained in the range of ₹65/kg- ₹80/kg – during the start of the quarter) and CPVC prices remained on a declining trend for the year. It saw an increase in other expenses and employee benefits expense on account of additional hiring & advertising spends towards bathware. In Q1 FY25, the EBITDA was ₹58 cr and grew by 29% YoY. The company highlighted low channel inventory driven by volatile PVC prices during June-July 2024. With PVC prices now softening and likely to stabilize, end-user demand is expected to remain strong and channel inventory to normalize.

#PAT #MARGIN

In FY24, the PAT margin was 7.1% and this rise was followed by increase in EBITDA margin. In Q1 FY25, the PAT Margin was 4.1% v/s 3.5% in Q1 FY24.

#MANAGEMENT #introduction

Parag Chheda, aged 51 years, is a Joint Managing Director (JMD) of the company. He has been associated with the Company since 27th April 1996 as a Director. He holds an associate degree in business administration from Oakland Community College. He has over 25 years of experience in the piping industry. Vipul Chheda, aged 47 years, is an Executive Director of the company. He has been associated with the company since 11th March 1997 as a Director. He has over 25 years of experience in the piping industry. W.e.f 7th Nov 2023, Anand Gupta has been appointed as Chief Financial Officer of the company. He is a Chartered Accountant with an experience of more than 20 years in Finance, Commercial planning and operations. He was associated with ACC Ltd for 14 years in different roles and responsibilities.

#COMPANY #POTENTIAL

The Indian plastic piping industry is worth ~₹47,000 cr, wherein the organized players have about 67% of the market. Polyvinyl Chloride (PVC) is the third largest selling plastic commodity after polyethylene & polypropylene. It is beneficial over other materials, owing to its chemical resistance, durability, low cost, recyclability, and others; thus, it can replace wood, metal, concrete, and clay in different applications. • In terms of end use, plumbing and sewerage pipes constitute ~55% of the industry’s total volume, followed by agriculture pipes (35%) and infrastructure & industrial pipes (10%). The infrastructure & industrial pipe segments are expected to witness the highest growth due to increased Government expenditure on the Jal Jeevan scheme which aims to provide rural drinking water connections and urban infrastructure. Plastic pipes still have low penetration in water supply management, an area currently dominated by expensive cement and steel pipes. advancing infrastructure development. • Plastic pipe industry is expected to report a volume CAGR of 10%-12% between FY23 to FY28. This projection considers favorable resin prices, potential revival in the urban real estate sector, and the Government’s emphasis on boosting farm income and • The domestic bathware market is estimated at ₹18,000 cr in FY23 (sanitaryware: ₹6,000 cr; faucets: ₹12,000 cr) and has posted a 7.9% CAGR over FY15-FY23. The bath fittings market is riding the wave of urbanization, consumer awareness, and real estate growth. As more households embrace modern amenities, the demand for stylish and functional bathroom fittings continue to rise.

#Company #Outlook

• It signed an asset purchase agreement with Klaus Waren Fixtures Private Limited, for the acquisition and assignment of identified assets for ₹55 cr (in two tranches) for the brand as well as the manufacturing facility in Bhuj. Another ₹7-₹10 cr of capex would be required for maintenance and de-bottlenecking and with that it shall be able to unlock production capacity of ₹100-₹120 cr. • The Bihar facility will be an integrated hub for the company, addressing the burgeoning demand in East India. Construction of the factory structure and utilities is currently in progress. The proposed capex for this facility has been increased to ₹220 cr, with the capacity now expanded to 48,000 MTPA (shall be complete by Q4 FY25). The Bihar facility in Begusarai will get commenced in January 2025. The facility will be commencing in the phased manner and it will take 6 months to operate in full utilization. • The agile execution of the Aquel by Prince brand was showcased at Plumbex India 2024. The company continues to penetrate key tier-2 and tier-3 markets in West and Northern India, with plans to expand into East and South markets in H1 FY25. The integration of Aquel’s distribution network and the appointment of sales staff are already in progress, pending regulatory approval. Products from Aquel by the company received enthusiastic feedback at the event. • The proposed capacity for water tank is estimated at 60 lakh litres per month at Bihar facility which shall go onstream in Q4 FY25. • The company has launched a new product named Greenfit PPR which has wide applications in hotels, commercial spaces, malls, hospitals and industry. • The company has guided 15% volume growth with the margin to be in the range of 12%-13% for FY25. • There are currently no plans for O-PVC (Oriented polyvinyl chloride pipes), with the focus shifting towards distribution-driven products and those catering to private projects. OPVC pipes represent a new generation of piping systems designed for highCASE STUDY pressure water conveyance. They are generally of superior quality compared to other piping solutions.

PRINCE PIPES & FITTINGS LIMITED 150-270
Expected level 320
Support 100

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Marico Limited company details report

Marico Limited is one of India’s leading consumer products companies in the domestic hair and wellness market. It is present across varied categories of hair care, skin care, edible oils, health foods, and male grooming, with a vast portfolio of brands such as Parachute, Saffola, Hair & Care, Nihar, Livon, Kaya Youth, and Coco Soul. Currently, it has presence in 25 countries across emerging markets of Asia & Africa, including Middle East, Bangladesh, Vietnam, Egypt and South Africa, constituting ~25% of the total revenue. The company has a retail reach of ~5.8 million outlets and direct reach of ~1 million outlets in the domestic market. The company has 8 factories that are strategically located in India. Marico is a leading player in the domestic hair and wellness market with a leadership position in categories such as coconut oils, value-added hair oils, and Parachute Rigids within coconut oils. The company has a three-pronged strategy of driving growth through key categories, innovations/entrance into the niche category, and scaling up its presence in international geographies. In recent times, the company has entered niche categories such as male grooming, premium hair nourishment and healthy foods.

Coconut Oils - Parachute Coconut Oil continues to be the dominant market leader in the branded coconut oil market, while ~30% of the coconut oil market is still unbranded, presenting an attractive opportunity to capture a significant share of the transitioning market, sustaining/improving its growth trajectory. Saffola Franchise - The product range includes Saffola oils, Saffola Oats, Saffola Mayonnaise, Saffola Peanut Butter, Saffola Soya chunks and many more in the health & nutrition category. VAHO- Within the category, mid & premium segments continued to fare better than the mass segment, Nihar Shanti Amla had a sluggish year, Parachute Advanced Jasmine continued to gain market share, Hair & Care continued to drive penetration of the brand, Parachute Advansed Aloe Vera witnessed penetration gains in key markets. Premium Personal Care & Digital First Portfolio - Beardo sustained its impressive growth trajectory. Just herbs performed robustly in FY24, coupled with expansion in its wide-ranging portfolio through the launch of a range of natural make-up and pure fragrances, PureSense offers skincare, mood-lifting fragrances and bath products and Coco Soul has created 100% ayurvedic and vegan products, using natural towards skincare, hair care and health concerns.

Business portfolio

Business strategy

Segmentswise revenue

Locations based revenue

Bangladesh delivered CC growth of ~12% in FY25, led by new extensions. The business has steadily reduced its dependence on the Coconut Oil portfolio. The mediumterm outlook for Bangladesh remains strong. • Vietnam posted ~4% CC growth during the year, impacted by sluggishness in core categories. Others* • *Others includes MENA (Middle east & North Africa), South Africa and NCD (New Country Development) & Exports. MENA region posted ~36% CC growth, led by strong traction across markets. The Middle East and Egypt businesses grew 26% and 73%, respectively in CC terms, led by a well-rounded performance across portfolios and successful new product launches in both geographies. South Africa delivered a CC growth of ~19%, driven by strong performance in the Health Care and Hair Care segments. While the NCD & Export segment grew by ~16%.

#SALES #GROWTH

Sales grew by ~12% YoY to ₹10,831 cr in FY25. Geographically, India business grew by ~14% YoY, aided by price interventions in core categories in response to a sharp rise in input costs, with an underlying volume growth of ~5%. While the international business was up by ~8% YoY in INR terms and ~14% in CC terms. The international business has navigated headwinds, including macroeconomic volatility and currency devaluation in select markets. While the Bangladesh and Vietnam businesses remained strong, the robust momentum in the MENA (Midde East and North Africa) and South Africa businesses has strengthened the revenue construct of the overall international business.