This multibagger stock made investors rich, increased by 145% in 2021
Multibagger stock: Shares of Prince Pipes and Fittings are one of the multibagger stocks in 2021. The stock has given around 10 per cent return in the last one month, whereas in the last 6 months, the stock has risen from around ₹495 to ₹748 per share level to give 50 per cent return to its shareholders. However, year-to-date, the stock has given around 145 per cent returns after rising from ₹305 to ₹748 levels.
However, HDFC Securities still sees more gains in this multibagger stock. According to the fundamental research report of the brokerage, the share price of Prince Pipes & Fittings is likely to touch the level of ₹885 per share in the next two quarters, giving a return of around 20 per cent to its shareholders.
What does the brokerage firm’s report say?
HDFC Securities’ report says, “PPFL’s earnings grew at a CAGR of 17 per cent in FY17-21. We are positive on the future growth prospects and expect PPFL to outperform the category. In our view, PPFL’s revenue and PAT is expected to register a CAGR of 21 per cent and 16.7 per cent in FY21-23E. With this we expect the company to generate consistent FCF with consistently high RoE.”
PPFL has a strong pan India presence with manufacturing facilities located in the north (42 per cent of the capacity); West (35 percent of the capacity) and South India (23 percent of the capacity). The company has a strong position in northern and western India though its brand is “Prince” while in southern India it operates through the brand “Trubore”. In 2012, it acquired the premium brand Truebore brand from Chemplast Sanmar.
PPFL is expanding its product basket by adding new products (DWC or Double Wall Corrugated Pipe, Storage Tank, Valve, Industrial Pipe etc.) which will help drive premiumization. The technical tie-up with Holland, a global leader in mold tooling, helps in manufacturing products of global standards.
On its suggestion to stock market investors regarding this multibagger stock, HDFC Securities said, “We think investors can buy the stock in the band of ₹740-750 and further dips for a fair value of the base case of ₹663.” 825 and the fair value of the bull case for the time horizon of 2 quarters is ₹885.”
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