Ratings of Prince Pipes and Fittings Ltd upgraded to 'CRISIL A+/Stable/CRISIL A1+'

CRISIL Ratings has upgraded its ratings on the bank facilities and commercial paper program of Prince Pipes and Fittings Limited (PPFL) to 'CRISIL A+/Stable/CRISIL A1+' from 'CRISIL A/Positive/CRISIL A1'.

The upgrade reflects the sustained improvement in the company's business risk profile driven by the healthy revenue growth and operating efficiencies. Despite covid-19 pandemic, revenue has continued to grow at a brisk pace backed by strong realization and steady volumetric sales. Revenue was Rs 1092 crore in H1 FY22, a 43.5% y-o-y growth as compared to H1 FY21 and 35% y-o-y growth from revenue in H1 FY20. Volume sales declined by 25.5% y-o-y to 18466 MT in Q1 FY22 and the same was on account of disruptions due to second wave of Covid-19. However, the business saw sharp recovery, with volume sales increasing by 22% y-o-y to 42845 MT in Q2 FY22. Operating margin continued to remain healthy at 15.02% during H1 FY22 and is expected to remain in the range of 15-16% going ahead. Return on capital employed is also expected to be at healthy level at around 23-25% over the medium term.

The ratings reflect the strong business risk profile marked by its market position in domestic plastic pipe industry supported by diverse product portfolio, geographical presence, and end-user industry, extensive experience of promoters, and a robust financial risk profile. These rating strengths are partially offset by presence in a highly competitive industry, moderate capacity utilization, susceptibility to volatility in raw material prices, and moderate working capital requirements.

Shares of Prince Pipes And Fittings Limited was last trading in BSE at Rs. 699.10 as compared to the previous close of Rs. 699.25. The total number of shares traded during the day was 31445 in over 4002 trades.

The stock hit an intraday high of Rs. 701.00 and intraday low of 695.55. The net turnover during the day was Rs. 21965045.00.

Source : Equity Bulls

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PrincePipesAndFittings INE689W01016 RatingUpgrade CRISIL