Prince Pipes shares surge 20% after Q2 results; is more steam left?

Prince Pipes and Fittings Ltd shares rose sharply in Wednesday's trading session, extending their upward move for the second straight session. The stock soared 19.85 per cent to hit a day high of Rs 749 over its previous close of Rs 624.95. At today's high price of Rs 749, the stock was down 1.38 per cent from its one-year high of Rs 759.50, a level seen on September 13, 2023. Despite the said drop, the counter has gained 44.87 per cent from its 52-week low of Rs 517, hit on November 10 last year.

On the earnings front, the company recorded a net profit of Rs 70.63 crore in the second-quarter (Q2 FY24) as against a loss of Rs 24.11 crore in the year-ago period. Revenue from operations came at Rs 656 crore in the September quarter, up 3 per cent when compared to Rs 636 crore in the corresponding period a year ago.

Prince Pipes said finished goods volume grew by 8 per cent year-on-year (YoY) in Q2 FY24 on account of growth across plumbing and SWR segments. EBITDA in Q2 FY24 improved sharply to Rs 94 crore with margins at 14.3 per cent.

Technical analysts largely suggested that support on the counter could be seen around Rs 680 levels. On the higher side, the stock may scale up to Rs 770 levels in the near term.

Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One, said, "Prince Pipes has seen a decisive spurt in today's session from the crucial support of 200-SMA (Simple Moving Average). A strong momentum is likely to get triggered only once it surpasses the crucial hurdle of Rs 760 level. Meanwhile, the counter is expected to hover within Rs 630-760-odd levels with positive biases."

AR Ramachandran from Tips2trades said, "Prince Pipes is bullish on daily charts and a close above resistance of Rs 715 could lead to a target of Rs 770 in the near term. Strong support will be at Rs 675."

Shiju Koothupalakkal, Technical Research Analyst at Prabhudas Lilladher, said, "A further rise can be anticipated with near term support visible near Rs 675 zone. The previous peak zone of Rs 760 can be re-tested in the coming days once a decisive close above Rs 724 is established."

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, suggested a near-term target of Rs 740 for Prince Pipes shares. Keep stop loss placed at Rs 680, he mentioned.

Echoing almost similar views, DRS Finvest founder Ravi Singh said the stock may scale Rs 740-750 levels in the near term. Keep stop loss at Rs 680, Singh underscored as well.

The counter was last seen trading higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150- and 200-day simple moving averages (SMAs). The counter's 14-day relative strength index (RSI) came at 65.16. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 55.27 against a price-to-book (P/B) value of 5.60.

The scrip has an analyst target price of Rs 817, Trendlyne data showed, suggesting a potential upside of 15 per cent in a year. It has a one-year beta of 0.61, indicating low volatility on the counter.

(Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.)

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