Prince Pipes & Fittings Ltd Management Discussions

GLOBAL ECONOMY

The global economy is navigating a pivotal period, having shown signs of stabilization throughout much of 2024 following an extended period of significant disruptions. Weve observed a gradual, albeit somewhat uneven, decline in inflation from its multi-decade peaks, moving closer to central bank target of around 2-3%. Concurrently, labor markets have normalized, with both unemployment and vacancy rates returning to prepandemic levels. Global growth has consistently hovered around 3 percent in recent years, with overall output nearing its potential. This stabilization provides a more predictable backdrop for our operations.

Despite the recent stabilization, the global economy is currently facing renewed uncertainty due to significant shifts in international trade policies. Notably, since February of this year, the United States has implemented several rounds of tariffs against its trading partners, leading to retaliatory measures from some affected nations. While initial market reactions to these announcements were relatively subdued, the near-universal application of tariffs by the United States in April 25 triggered significant volatility, including historic declines in major equity indices and notable increases in bond yields. Although there has been a partial recovery following subsequent pauses and exemptions announced on and after April 25, these developments underscore the evolving and sometimes unpredictable nature of global trade dynamics, which we continue to monitor closely.

Source: IMF WEO: https://www.imf.org/en/PubUcations/WEO/ Issues/2025/04/22/world-economic-outlook-april-2025

INDIAN ECONOMY

Recent GDP figures for Indias second quarter of fiscal year 2024-2025, showing 5.4% year-over-year growth, were lower than the Reserve Bank of Indias (RBI) earlier projection of 6.8%. This slower growth in the first half of the fiscal year (6%) led the RBI to revise its annual projection down to 6.6% from 7.0%.

However, its crucial to look beyond the headline numbers to understand the full picture of Indias economic health. Rural consumption has remained strong, backed by robust agricultural performance, and the services sector continues to be a significant growth driver. Furthermore, manufacturing exports, especially in high-value components like electronics, semiconductors, and pharmaceuticals, have demonstrated considerable strength, highlighting Indias increasing integration into global value chains. We believe the observed slower growth in the secondary sector is temporary and can be attributed to monsoon-related disruptions. These underlying strengths in the Indian economy

are important considerations for our business outlook.

In contrast to some of the global trends, Indias growth outlook appears relatively more stable, projected at 6.2% in 2025. This robust performance is anticipated to be driven by strong private consumption, particularly within rural areas. This positive domestic outlook is a key factor we consider in our strategic planning.

Source: https://www.deloitte.com/us/en/insights/topics/economy/

asia-pacific/india-economic-outlook.html

OUTLOOK

Looking ahead, growth projections for advanced economies indicate a slight deceleration. We anticipate a drop from an estimated 1.8 percent in 2024 to 1.4 percent in 2025, followed by a modest uptick to 1.5 percent in 2026. Specifically, the United States is projected to see a decrease in growth to 1.8 percent in 2025, a full percentage point lower than 2024. Tariffs are expected to continue influencing growth into 2026, projected at 1.7 percent, amidst moderate private consumption. The Euro area is also expected to experience a slight decline to 0.8 percent in 2025 before recovering modestly to 1.2 percent in 2026. The combined impact of increased uncertainty and tariffs are key factors contributing to this more subdued growth in 2025 for these regions.

For emerging market and developing economies, growth under the reference forecast is projected to decline to 3.7 percent in 2025 and 3.9 percent in 2026, following an estimated 4.3 percent in 2024. We continue to monitor these global economic trends closely as they may influence demand and market conditions relevant to our business.

Source: IMF WEO - https://www.deloitte.com/us/en/insights/ topics/economy/asia-pacific/india-economic-outlook.html

INDUSTRY OVERVIEW

INDIAN PLASTIC PIPES AND FITTINGS MARKET

The Indian PVC pipe market is experiencing robust growth, demonstrating resilience even after the pandemic. This is driven by significant and expanding demand for water supply and management infrastructure, where pipes are a critical component.

The India Plastic Pipes Market, valued at USD 7.40 billion in 2025, is projected to reach USD 16.54 billion by 2031, exhibiting a robust Compound Annual Growth Rate (CAGR) of 14.18%.

Indias unprecedented and rapid urbanization, with its urban population projected to reach around 600 million by 2030, nearly doubling from around 377 million in 2011, reflecting a rapid urbanization rate of about 2.3% annually, is a major driver for the plastic pipes market. This demographic shift intensifies the demand for robust urban infrastructure, particularly efficient water supply and sewage systems.

Source: Industry Research

Plastic pipes are essential for these utilities due to their durability, ease of installation, and cost-effectiveness. Government initiatives like the Smart Cities Mission and AMRUT further boost this demand by investing heavily in upgrading urban infrastructure, ensuring a consistent need for plastic piping systems across residential, commercial, and industrial developments, as well as rural-urban linkages and smart water management.

Source: https://www.techsciresearch.com/report/india-plastic-

pipes-market/16656.html

INDIAN BATH & SANITARYWARE MARKET

The India Sanitary Ware Market is set for substantial growth, projected to increase from USD 338.59 million in 2024 to USD 508.45 million by 2030, at a CAGR of 7.01%. This expansion is driven by urbanization, rising disposable incomes, and greater sanitation awareness, supported by government programs like Swachh Bharat Abhiyan and Smart Cities Mission. The market is also seeing increased demand for aesthetically pleasing, durable, and technologically advanced products, spurring innovation and the expansion of water-efficient and smart solutions by both

Source: Industry Research

Key Trends

• Smart and Touchless: Driven by a growing preference for convenience, hygiene, and automation, India is experiencing a surge in demand for smart and touchless sanitary ware, particularly in urban, commercial, and luxury hotel settings. Products like sensor-based faucets and automated flush systems are gaining traction. The COVID-19 pandemic accelerated this trend by emphasizing contactless hygiene. Manufacturers are now integrating IoT for remote control of water usage and temperature.

• Sustainable: Sustainability is now a core focus for Indias sanitary ware industry, driven by heightened awareness of water conservation and environmental impact. Growing water scarcity and government green initiatives are boosting demand for water-efficient products like dual-flush toilets, low-flow faucets, and waterless urinals. Manufacturers are innovating with eco-friendly materials such as recycled ceramics and biodegradable composites. Some companies are also integrating rainwater harvesting and greywater recycling into designs, emphasizing sustainable water usage.

• Aesthetic: Indian consumers are increasingly demanding personalized and aesthetically pleasing sanitary ware to match modern bathroom designs. Influenced by home decor trends and social media, theres rising interest in customized fixtures with unique colors (e.g., matte black, metallics, pastels), finishes, and materials, moving beyond traditional white. Luxury brands offer bespoke solutions for textures and patterns. Modular, space-saving, and multifunctional bathroom fixtures are also gaining popularity, especially in compact urban living spaces.

Source: https://www.techsciresearch.com/report/india- sanitary-ware-market/17359.html

COMPANY PROFILE

Prince Pipes and Fittings Limited has solidified its position as a Leading integrated piping solutions provider in India, boasting a rich legacy spanning over three decades. From its inception, the Company has been instrumental in shaping the Indian pipes and fittings landscape, consistently delivering innovative solutions across critical sectors including plumbing, agriculture, borewell, and comprehensive sewerage and underground drainage systems. Our diverse product portfolio, marketed under the trusted brand names of Prince Piping Systems and Trubore, encompasses five key polymer types: CPVC, UPVC, HDPE, PPR, and LLDP, ensuring a versatile offering that meets a wide array of application needs.

As a dynamic enterprise, Prince Pipes is strategically expanding its growth horizons beyond its established strengths. A significant focus is on diversifying into nascent, high-potential verticals such as Modern Plumbing, Bathware, and Water Storage Tanks. This deliberate strategic thrust aims to transform the Company into a more resilient and comprehensive entity, leveraging its core competencies to capture new market opportunities and enhance its overall market presence.

Our operational prowess is underpinned by a robust infrastructure designed to effectively serve the pan-India market. With eight state-of-the-art manufacturing facilities strategically

located in Athal, Dadra, Haridwar, Kolhapur, Chennai, Jaipur, Sangareddy and Begusarai, we are well-equipped to cater to the escalating demand within the Indian piping industry. This extensive manufacturing footprint is complemented by a deeply entrenched and expansive distribution network comprising over 1,500 channel partners nationwide, ensuring efficient reach and timely delivery of our products.

Prince Pipes enduring success is built on an unwavering commitment to quality, trust, and innovation—hallmarks that define our brand. We continuously strive to adapt to changing times and evolving customer demands. Our strategic initiatives are geared towards building a highly efficient supply chain, fostering environmental stewardship, and consistently optimizing capital productivity, all aimed at generating superior value for our stakeholders and sustaining our trajectory as one of the fastest-growing companies in the sector.

VISION

To be an acknowledged leader in the Indian plastic piping industry by exceeding customers expectations and maximizing the bottom line for all our stakeholders.

MISSION

Our mission is to bring a revolution in the plastic piping industry through innovative solutions that will create profitable growth and benefit our customers & the society at large.

Plant location	Installed capacity (TPA)	Production capacity (TPA)	Products	Year of establishment
Athal (UT of Dadra and Nagar Haveli)	11,868	10,080	Fittings	1995
Dadra (UT of Dadra and Nagar Haveli)	72,468	52,587	Pipes and Tanks	2000
Haridwar (Uttarakhand)	100,069	78,971	Pipes, Fittings and Tanks	2008
Chennai (Tamil Nadu)	56,436	42,376	Pipes and Tanks	2012
Kolhapur (Maharashtra)	19,740	15,120	Pipes	2012
Jaipur (Rajasthan)	56,674	45,792	Pipes and Tanks	2019
Sangareddy (Telangana)	56,304	45,198	Pipes, Fittings and Tanks	2021
Begusarai (Bihar)	24,000*	18,360	Pipes and Fittings	2025
Total	3,97,559	3,08,484

*Phase 1 installed capacity

Key Financial Highlights

	FY 2025	FY 2024	y-o-y change (%)
Revenue from operations	25,239.16	25,687.48	(2)%
Other income	137.44	160.93	(14)%
EBITDA	1,617.94	3,074.15	(47)%
Profit after exceptional items and before tax	588.47	2,437.68*	(76)%
Profit after tax (PAT)	431.36	1,824.97	(76)%

* Exceptional item for year ended 31.03.24 represents net gain of Rs.17.93 crore towards settlement of registration of Corporate office,

at The Ruby, Dadar, Mumbai, based on the valuation report.

Annual Report 2024 - 2025

Ratios	FY 2025	FY 2024	Change
Debtors Turnover (x)	5.01	5.14	(2.52)%
Inventory Turnover (x)	4.82	5.95	(18.99)%
Debt service coverage ratio (x)	0.84	3.02	(72.33)%
Current Ratio (x)	2.12	2.43	(12.79)%
Debt Equity Ratio (x)	0.17	0.07	(126.13)%
Operating Profit Margin (%)	2.71%	9.04%	(70.0)%
Net Profit Margin (%)	1.71%	7.10%	(75.94)%
Return on Equity - RoE (%)	2.76%	11.32%	(75.57)%

Balancing Risk and Opportunities

Types of risks	Risk description	Mitigation
Industry Risks
Raw material supply	Pipes are made from UPVC, CPVC, HDPE, and PPR resins, all of which are sensitive to crude oil price fluctuations. Therefore, any increase in crude oil prices directly raises the cost of these resins, which can significantly impact profitability and the ability to meet market demand.	We mitigate the impact of volatile raw material prices through strong supplier relationships, strategic inventory management, and long-term contracts. This approach allows us to acquire necessary commodities based on production needs and cushion against price hikes.
Competition	The industry we operate in is highly competitive and is currently experiencing consolidation. This trend, coupled with aggressive branding, marketing, and pricing strategies from other players, could significantly impact our market share.	We maintain our competitive edge by continuously strengthening our operational efficiencies and strategic positioning, leveraging our extensive manufacturing, distribution, and diverse product offerings in plumbing, irrigation, and sewerage solutions. Additionally, were committed to volume growth through robust branding efforts, expanding into new segments like Modern Plumbing and Bathware, and seeking further opportunities for market advancement.
Operational Risks
Logistics and Supply Chain	Supply chain disruptions or logistical challenges can arise, potentially impacting material receipt and vendor payments.er operational risk is miss	We ensure robust control over our inventory, invoicing, stock, and dispatch operations through regular reviews and independent checks. Specifically, our receiving department operates separately from purchase and invoice processing, and the bill booking department independently verifies rates, destinations, tonnage, and other charges after user department confirmation. This meticulous approach, coupled with close supplier collaboration, ensures high-quality supply, reliability, and business continuity.
Enterprise Risk Mgmt. covering anti-Fraud Control Framework	The prevalence of counterfeit goods in the market and the failure to conduct thorough due diligence on new customers, channel partners, or distributors pose significant credibility and duplicity risks to our operations.	We proactively combat the risk of counterfeit goods through assessed actions and established monitoring processes to ensure effectiveness and implement corrective measures. Our commitment includes regularly conducting surprise raids on illegal manufacturing and sales premises with the help of authorities.
Safety risks	Our companys core business revolves around manufacturing processes. As part of this, some of our employees operate plant machinery and equipment, all of which carry inherent risks of injury or accidents.	The company follows high safety standards across plants designed to ensure inherent safety following various applicable standards. Regular safety audits, continuous monitoring, periodic review, and timely maintenance of equipment and infrastructure are conducted to prevent accidents and downtime to ensure good progress.

 

Types of risks	Risk description	Mitigation
Financial Risks
Foreign exchange	Our reliance on imported raw materials and equipment means that adverse exchange rate fluctuations could significantly impact our overall performance.	We actively assess and mitigate exchange rate exposure from foreign currency transactions to protect our financial health. We achieve this by strategically utilizing various derivative financial instruments, including foreign exchange forward contracts, interest rate swaps, and crosscurrency swaps
Changing Regulations and Policies	The Indian government has implemented a five- year anti-dumping duty (ADD) on CPVC resin/ compound imports from China and South Korea, effective until June 2029. Additionally, an antidumping investigation has been initiated on PVC resin (suspension grade) originating from China, Indonesia, Japan, South Korea, Taiwan, Thailand, and the U.S.	Weve mitigated the risk associated with varied CPVC resin sourcing by now exclusively procuring CPVC compound from Lubrizol. Our procurement team actively seeks the best global prices and prioritizes sourcing from countries with low or no duty, recognizing that domestic prices will eventually align with global PVC trends.
Credit	Since the majority of our sales to distributors are on open credit with standard payment terms of 15-30 days, failure to collect receivables could significantly impact our financial performance.	We manage the significant timing difference between our raw material payment terms (less than a week for domestic, 90-150 days for imported) and our distributor payment terms (15-30 days) by leveraging working capital facilities. This strategy, coupled with channel financing, helps us optimize our working capital requirements and improve collections.
Regulatory Risks
Regulatory/Legal	Evolving regulatory changes across tax, legal, and industry landscapes may impact our companys performance.	We maintain stringent governance practices for legal and regulatory matters through a dedicated team of qualified professionals who regularly monitor evolving regulations, ensuring compliance and providing timely input for prompt corrective action.

Sustainability

At Prince Pipes, our dedication to Environmental, Social, and Governance (ESG) principles goes far beyond just numbers. These principles actively shape our daily operations, purchasing decisions, business strategies, and our fundamental role as a responsible corporate citizen. We are continuously expanding and deepening our focus on ESG to create a more positive impact by providing opportunities, manufacturing responsibly, and approaching every aspect of our business with strong conscientiousness. Essentially, we prioritize ESG through sustained, environment-specific programs that are integrated into our core business.

> Carbon emissions have been reduced by 38.3% (MJ/MT production) since FY-17

> For FY 2025, ~ 20% of the total energy requirement was met through renewable energy sources

> Achieved GreenPro Certification from CII for CPVC products, reinforcing commitment to sustainable and eco-friendly manufacturing

Environment

At Prince Pipes, we are deeply committed to being responsible stewards of our natural environment. Our efforts are centered on conserving natural resources, minimizing pollution, protecting biodiversity, and ensuring a sustainable future for coming generations. We are proactively taking decisive steps to address the visible impacts of climate change, which includes increasing our adoption of renewable energy and working towards carbon neutrality. Furthermore, we are enhancing our water recycling efforts and maintaining stringent quality standards, which has earned us multiple safety awards. Every business decision we make consistently prioritizes sustainable development.

Social

Prince Pipes and Fittings is deeply committed to social responsibility, extending our efforts to both our employees and the broader community. We prioritize fostering a diverse, vibrant, and merit-based work environment. Our Corporate Social Responsibility (CSR) policy focuses on strategic social investments, with a particular emphasis on empowering the plumbing community and supporting educational initiatives. This past fiscal year, weve undertaken several key initiatives, in collaboration with our implementation partners, that have significantly benefited both our industry and society at large. Some of our key initiatives along with our implementation partners benefitting the industry and larger society undertaken this fiscal, are as follows:

Prince Pipes implements its Corporate Social Responsibility (CSR) initiatives through strategic partnerships with renowned organizations such as United Way Mumbai, Ambuja Foundation, Mahita, Empower Foundation, Shree Kutch Bidada Visha Oswal Jain Mahajan and Jankalyan Medical Society Sanchalit.

The companys CSR portfolio spans critical development areas including water resource augmentation, sustainable agriculture, livelihoods, sanitation, education, and skill development. These initiatives are designed with a strong focus on underserved and rural communities, particularly in Rajasthan, Telangana, Bhuj, and the Delhi-NCR region.

Key Objectives of CSR Projects in FY 2024-25

- Promote sustainable water management through rainwater harvesting, pond rejuvenation, and micro-irrigation systems.

- Enhance agricultural productivity and income generation through Agri Horti models, soil conservation, and farmer training.

- Improve access to quality education for underprivileged students, with a focus on adolescent girls and career readiness.

- Support higher education through targeted scholarship programs to reduce dropouts and encourage academic progression.

- Empower women through livelihood training, entrepreneurship development, and access to financial literacy and government schemes.

- Upgrade sanitation infrastructure in government schools to ensure a safe and hygienic learning environment.

- Providing Ambulance facilities.

- Redevelopment and Renovation of Cow Sheds.

- Foster community ownership, behavioral change, and longterm sustainability through awareness campaigns and grassroots engagement.

- Deliver preventive healthcare services and awareness to vulnerable communities, including plumbers and their families.

- Strengthen vocational skills and certify plumbers through structured training programs aligned with industry standards.

Governance

At Prince Pipes, our commitment to strong values and ethical business conduct is unwavering. We uphold high standards of governance that guide us in achieving robust, balanced, and

sustainable growth for all stakeholders. Our experienced Board of Directors, supported by robust risk management and compliance processes, plays a pivotal role in ensuring the highest standards of governance and disciplined oversight across all our corporate activities.

People

At Prince Pipes, our people are the cornerstone of our progress. Our comprehensive approach to human capital management encompasses employee development, safety, leadership training, and family well-being. Our policies are designed to foster an environment of operational democracy, ensuring our employees feel heard and empowered to take ownership in their roles.

Key aspects of our HR policy include:

s Skill Enhancement Programs: We regularly conduct specialized training programs, including Six Sigma, to enhance employee skills and support career development.

s People-Centric Culture: We prioritize talent attraction, nurturing, and retention. Inclusivity, diversity, and transparency are integral to our organizational culture.

s Human Rights: We respect and promote human rights, conducting due diligence to prevent adverse impacts from our business activities.

s Safe and Hygienic Workplace: Our workplace environment upholds employee dignity, safety, and well-being. We comply with statutory provisions related to health and safety.

s Training Opportunities: We provide internal and external training to upskill the Companys 2,150 employees, contributing to organizational vision and growth.

s Employee engagement and welfare initiatives include health-related programs such as weight loss competitions, health webinars, yoga and meditation sessions, and emotional health discussions with experts.

Health, Wellness, and Safety

Our unwavering commitment to workplace safety is paramount. Were proud to report no incidents that could lead to legal actions, compensation claims, increased insurance premiums, reduced productivity, or reputational damage. We believe that responsible health and safety practices are fundamental to our long-term sustainability.

We prioritize cultivating a work environment that emphasizes safety awareness at all levels:

- Occupational Health and Safety (OHSMS): Our OHSMS certification process, supplemented by plant Safety

Committees, governs safety practices. Specially trained safety professionals and line management contribute to our safety initiatives.

-Safety Performance Metrics: We measure safety performance using metrics such as Lost Time Injury (LTI) and Accident-Free Days (AFD), benchmarked against global industry standards.

- Behaviour-Based Safety (BBS): Our BBS initiative fosters a zero-accident culture by identifying hidden habits and environmental factors. Employees actively participate in hazard identification and risk assessment.

- Employee Training: We provide regular safety and skill upgradation training, including:

• Daily Toolbox Talks (TBT) on relevant topics

• First aid training by St. John Ambulance

• BBS training by external experts

• EHS awareness training for new employees

• Hazard Identification and Risk Assessment (HIRA) training

• Safety auditor training

• Practical training on fire safety equipment

• Quarterly mock drills

• Environment and safety awareness events, including tree plantation drives

• Our commitment to safety extends beyond compliance — it is ingrained in our organizational culture

Innovation

Innovation remains a cornerstone of Prince Pipes success, enabling us to achieve strong product differentiation and top-of- mind recall. With a four-decade legacy, our unwavering passion for impacting Indias water infrastructure has been a constant driving force. We take immense pride in our industry leadership, which allows us to understand evolving needs and anticipate future trends effectively.

Leveraging this strength, Prince Pipes consistently introduces new products that align with evolving industry trends, changing customer needs, and international modern technologies in water management. Our commitment to innovation drives sustained investments across our manufacturing capabilities, research and development, information technology, and sustainability initiatives.

As part of our goal to be an end-to-end pipes and fittings solution provider, we continuously enhance our comprehensive product

portfolio. Notably, we have recently Launched the following products:

> Septic tanks under the brand Bio-Fit for efficient wastewater management

• Engineered to enable safe effluent discharge via soak pits or dispersion trenches, these tanks facilitate natural filtration and cleansing, thereby protecting groundwater quality

• This environmentally conscious product range reflects our dedication to developing sustainable infrastructure solutions

Internal Control

Prince Pipes operates with a robust internal control system, underpinned by well-documented procedures across all corporate functions. These controls provide evidence-based assurance of our operational effectiveness, efficiency, sound financial management, and adherence to legal requirements. Our policies and procedures are regularly updated under the supervision of the Internal Auditor, ensuring all processes and controls align with industry standards and regulations. The Board and the Audit Committee actively oversee the adequacy of these internal controls, monitoring the implementation of

internal audit recommendations through regular compliance reports. Furthermore, independent auditors have verified the adequacy of our reporting, reinforcing our commitment to strong governance.

Cautionary Statement

Certain Statements found in the Management Discussion and Analysis may constitute "Forward Looking Statements" within the meaning of applicable securities laws and regulations. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that are difficult to predict, and which may cause our actual results, performance, or achievements to be different from any future results, performance, and achievements expressed or implied by these statements. Following the Code of Corporate Governance approved by the Securities and Exchange Board of India, shareholders and readers are cautioned that in the case of data and information external to the Company, no representation is made on its accuracy or comprehensiveness though the same are based on sources thought to be reliable. The Company does not undertake to make any announcement in case any of these forward-looking statements become materially incorrect in the future or any update made thereon.