Prince Pipes and Fittings Ltd (NSE: PRINCEPIPE) Q3 2026 Earnings Call dated Feb. 11, 2026
Corporate Participants:
Parag J. Chheda — Joint Managing Director
Anand Gupta — Chief Financial Officer
Nihar Chheda — Vice President – Strategy
Analysts:
Unidentified Participant
Sumeet Khaitan — Analyst
Keshav Lahoti — Analyst
Meet Jain — Analyst
Shivani Tanna — Analyst
Sneha Talreja — Analyst
Varun Julasaria — Analyst
Praveen Sahay — Analyst
Karan Gupta — Analyst
Vignesh Iyer — Analyst
Aasim Bharde — Analyst
Shravan Shah — Analyst
Presentation:
operator
Ladies and Gentlemen, good day and welcome to Q3 and 9 months FY26 earnings conference call of Prince Pipes and Fittings Limited hosted by MUFJ in time. As a reminder, all participants line will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sumit Ketan from MUFG in time. Thank you and over to you sir.
Sumeet Khaitan — Analyst
Good morning everyone. I welcome you all to the earnings conference call to discuss Q3 and 9 months FY26 results of Prince Pipes and Fittings Limited to discuss the result we have from the management, Mr. Parag Chera, Joint Managing Director, Mr. Neha Chera, Vice President Strategy and Mr. Anand Gupta, Chief Financial Officer. They will take you through the results and the business performance after which we will proceed for Q and A session. Before we proceed with the call, I would like to mention that some of the statements made in the today’s call may be forward looking in nature and may involve risk and uncertainties.
For more details, kindly refer to investor presentation and other filings that can be found on the company’s website. With this I now hand over the call to the management for their opening remarks. Thank you. And over to you sir.
Parag J. Chheda — Joint Managing Director
Thank you. Sumit Good morning and thank you for joining us for our quarter three and nine months FY26 financial results the presentation and the press release have been issued to the stock exchanges and uploaded on our website. I hope everybody has been able to go through the same the pipe industry witnessed a challenging operating environment during the quarter, marked by subdued demand across key applications of plumbing, agriculture and infrastructure. Despite these industry challenges, our focus remains firmly anchored on strengthening operational resilience. As a result of this, we have been able to deliver a low single digit growth in December quarter.
Despite these challenges, we continue to make sustained investments in brand building, product portfolio expansion and distribution network enhancement. During the quarter, we introduced CPVC pipes under the SmartFit plus brand across multiple markets, further strengthening our presence in the plumbing solution segment. Innovation and portfolio diversification into value added products remain integral to our growth story. We are also actively pursuing demand generation initiatives in the under penetrated markets to further expand our reach and drive volume growth. These product introductions and increased focus on Demand generation is expected to improve our overall product mix and strengthen our engagement with key stakeholders including plumbers, contractors and other channel partners which remain vital to our growth journey.
In parallel, we continue to deepen our brand connect through meaningful and purpose driven initiatives. During the quarter we unveiled our new brand campaign India Ki Pragati Ka Taach celebrating the people powering India’s progress over the last four decades. Our company has proudly contributed to India’s infrastructure development by delivering a diverse and reliable range of solutions spanning agriculture, borewell piping and advanced plumbing systems. This campaign is a tribute to the plumbers, contractors, engineers and distributors who have played a pivotal role in strengthening the country’s infrastructure ecosystem. During the quarter we undertook focused brand activation initiatives in the bathwear segment under the Aqual brand.
The Akwel Cashback Reward Program which offers direct cash initiatives to plumbers on select bathware products has been introduced to strengthen engagement with our key influencers. The bathware segment continues to remain a strategic focus area for us supported by its superior margin profile and strong long term growth potential. Looking ahead, we remain optimistic about a gradual recovery in demand conditions supported by early signs of stabilization in PVC pricing trends. Our continued emphasis on geographic expansion, product innovation and operational excellence provides us with confidence to effectively navigate near term market uncertainties. In conclusion, despite external headwinds, we are confident that our strong fundamentals, diversified product portfolio and customer centric approach position us well for a sustained long term growth.
Thank you for your time. I will now hand it over to our CFO Mr. Anand Gupta to take you through the key financial highlights.
Anand Gupta — Chief Financial Officer
Thank you Paragbhai and good morning everyone. I’ll be taking you through the Q3 and 9 months FY26 financials. Now starting with quarterly highlights, revenue from operations stood at 573 crores and our volume for the quarter stood at 42,575 metric ton growth of 3%. YoY. EBITDA for the quarter stood at 828 crores while margin stood at 5%. During the quarter we have taken an exception of rupees 2.05 crore net of tax towards estimated increase in provision for employee benefits arising from the implementation of the new Labor Code. Profit after tax after exceptional items for the quarter stood at minus 2 crores. Now for 9 months FY26 highlights Revenue from operations stood at Rs. 17,48 crores. Our volume for 9 months FY26 stood at 1 29,071 metric ton as compared to 1 26,748 same period last year A growth of 2% EBITDA for the 9 months stood at 122 crores.
A growth of 12% YOY while margin stood at 7%. Profit after tax after exceptional item stood at 17 crores. Our working capital days for 9 month FY26 stood at 66 days compared to 90 days same period last year. Receivable has improved to 49 days as compared to 53 days same period last year. And inventory day stood at 76 days compared to 102 days same period last year. With this I now end my speech and open the forum for question and answer session.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch tone telephone. If you wish to remove yourself from the question queue you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. The first question is from the line of Keshav Lahoti from HDFC Securities. Please go ahead.
Keshav Lahoti
Hello. Hi. Thank you for the opportunity. The first is on the guidance what you have guided earlier, is there any revision downwards? And secondly, how has been the Jan trend? Other peers have indicated Jan has been good. Fair to assume possibly the growth in Jan should be double digit.
Nihar Chheda
Yeah, growth in January has been double digit as everyone is aware we have PVC prices have bottomed out in the December quarter and we have seen a sharp increase in PVC prices of more than 11 to 12 rupees now in the span of one month we have seen sharp restocking from channel partners and given our new facilities and additional capacities that we have put up, we have been in a strong position to be able to cater to the upswing in demand. So yes, January growth has been double digit and we remain positive that this is not good.
This is going to be a sustainable kind of a positive sentiment amongst the channel for next few months and quarters which should lead to better volume growth going forward.
Keshav Lahoti
Got on Jan, is it more to do with restocking or have we seen, you know, some green shooting, you know, actual demand recovery? And secondly at currently how is the channel inventory? Is it elevated because raising prices has been increasing or has it got normalized? How should we see?
Nihar Chheda
Yeah, so of course January has been primarily driven by restocking demand. I would not say channel inventory is very high right now because to begin with channel inventory was very low in December. So I think channel inventory is still getting normalized as we speak. So yeah, that is where it is. And anyway for the end product this tends to be a strong quarter in terms of plumbing and agri. So that fueled by strong restocking I think will lead to some sustainable uptick in demand going forward.
Keshav Lahoti
Got it. And on lubrizol earlier we are doing CPVC with them. Now we have launched our own brand. So how the dynamics will change possibly then growth be better. How can possibly you will have more, you know margins. Margins can improve. And is it completely over with Lubrisolve 100% or we have tie up in still in few states?
Nihar Chheda
Yeah, we have in cpvc. We have moved on to our own in house compounding and we have launched our brand Smart Fit plus in the December quarter. Of course our costs go down as a result of this and we have passed that on to the channel. And that is reflected in the kind of volume growth that we have had in the December quarter mainly has been led by the plumbing segment and specifically in that CPVC has been our highest growing segment in the December quarter. So I think most of the cost benefit we have passed on to the channel and we are growing and increasing our market share in the CPVC space.
Keshav Lahoti
So what sort of pass on has happened because of this? Any broader range.
Nihar Chheda
I think it would be kind of a 6 to 7% cost benefit which we have passed on.
Parag J. Chheda
Okay, that is good to hear. Thank you.
Parag J. Chheda
Thank you.
operator
Thank you. Participants who wish to ask a question may press star and one at this time. The next question is from the line of meet Jain from Motilal Oswal. Please go ahead.
Meet Jain
Hello. Hello. Hi sir, just a personal question. How much was the inventory losses this quarter and the nine months?
Anand Gupta
For this quarter we had around 18 to 20 crores of inventory loss and nine months. I’ll update you offline because we have already given quarter wise. So this quarter we have 18 to 20 crores.
Meet Jain
Got it. My second question is regarding our inventory days. We saw a good decline of inventory days Y as well as sequentially. So can you throw some light? What strategies have we adopted for them and what led to this decline?
Nihar Chheda
Yes, I think for us working capital and cash flow has been sort of a KPI for the senior management team. I think major free cash unlock has happened from reduction in inventory which is primarily driven by. We have tried to increase our sourcing from domestic sources where lead times are lower and we have to get we can work on just in time inventory. And as far as. So I think going forward inventory should remain in this kind of a range of 70 odd days and receivables we have seen reduced to 49 days. Maybe Anand can add on the initiatives we are taking for reduction of receivables.
Anand Gupta
Yeah, so we have taken several steps. One of them is aggressive channel finance which the channels are undertaking and making sure that they are given more liquidity in order to have better payment to company. And at the same time we have also given good. The policy which we had changed one year back has also fueled the channel to be more participative in the CD policy and other policies. So this has made us make sure that the data days are around 949 days and we are sure that in next six months it should be in mid-40s is what we are targeting.
Meet Jain
Okay. Okay. So on this channel stocking and channel 20 start also, as we know that the mix like the plant diversification across players and across industry has been very strong. So do you believe that the channel inventories will go back to the previous levels or it will stay down at the lower level itself because of just in time.
Nihar Chheda
I think if you look at the behavior of channel partners, especially medium and large channel partners, because of such a large range of SKUs, which is a nature of the industry, channel partners like to have good amount of stock and they have built their infrastructure accordingly. And that’s how large channel partners ensure that even they continue to grow. So in this kind of a stable pricing environment, of course there has been extreme increase in the past month. Going forward, I feel that it will be more stable now that we have reached this level of around 70 rupees per kg.
I expect more stability, lower volatility going forward. So in that kind of a market, channel partners also like to sit on inventory because supply creates demand and availability is key. So for large channel partners, the way they can differentiate compared to smaller channel partners or compared to channel partners or smaller companies is by having a very strong service that they can give to the retailers across the large range of SKUs. So to answer your question, going forward I expect channel inventory to normalize as PVC prices are also stabilizing.
Meet Jain
Understood. And last one bookkeeping question is can you exit the CPVC growth numbers this quarter? How much growth did we.
Nihar Chheda
It has been high double digit growth in CPVC
Meet Jain
Volume.
Nihar Chheda
Yeah, volume growth of CPVC has been high double digit. It is of course our fastest growing polymer and it has been high double digit. And we expect going forward, you know, we are seeing major consolidation. So if you see the pipe industry right now, large players are growing at A faster pace and we feel now that we have our own brand SmartFit plus and CPVC we will be able to catch up in terms of volume growth going forward because most of this growth that is happening is happening in CPVC because PVC was of course facing challenging times in the past year.
So going forward PVC of course growth will normalize and CPVC now that we have more flexibility and agility in terms of in house compounding and that we have passed on the cost to the channel we expect CPUC will continue to grow well for Prince and for PVC now the environment is better. So we are optimistic on growth in the immediate term and in the medium term.
Meet Jain
Undertook. Thank you so much.
Nihar Chheda
Thank you.
operator
Thank you. The next question is from the line of Shivani Tanna from Daulat Capital. Please go ahead.
Shivani Tanna
Hello. Hello. Am I audible?
Nihar Chheda
Yes.
Shivani Tanna
Y es actually I had a couple of questions regarding the guidance. So the volume guidance guided for FY26 was of high single digit while 9 month is reported as of 1.8%. So is there any revised guidance for the same?
Nihar Chheda
No, we believe that Q4 like we have, you know like I have mentioned at the beginning of the Q and A growth has been encouraging and with CPVC now that we are growing well with SmartFit plus and in PVC with a better growth environment and lower volatility in input price prices sentiment in channel has improved. So I believe that fourth quarter should be the best quarter for Prince.
Shivani Tanna
Okay, and any guidance regarding FY27?
Nihar Chheda
Yeah, I think we the the sentiment continues. We are optimistic, we have put up the capacity and we feel now both across pvc, CPVC and a few other new product launches that we are doing next year should be double digit kind of volume growth that we are aspiring for.
Shivani Tanna
Okay, understood. Next question is regarding the CAPEX plan. So the planned capex in FY26 was rupees 120 crore which has been completed while 110 crore is still pending. So like how much was it done in Q4 and expected for 4th Q?
Anand Gupta
So if you’ll see our capex for 9 months is around 160 crores is something what 160 crore is what we have done and Q4 we do not have major capex lined up but actual is something which we intend to complete in Q4 that will come around 4045 crores is that and regular CapEx will be in the range of 15 crores kind of. So you can expect Q4 number to be around 60 including AQEL and 165 we have already done in nine months so we land up around 225, 230.
Shivani Tanna
Okay. And if I could just squeeze in one more question.
Nihar Chheda
Yeah.
Shivani Tanna
Yeah. So regarding the bathware segment. So revenue and EBITDA loss was earlier guided as a breakeven for 25 crore in Q2FY27. So like what is the now current revised guidance?
Nihar Chheda
See I will not revise the guidance. I think it’s too early. I think if you see that we have grown this year it’s a budding segment. We have just expanded to south and east in the past quarter so that cost has come but that sales will take some lag effect. So for the nine months the loss from the bathware segment is 18 crores. For the nine months FY26 so around 6 crores per quarter. I feel that either September or December is when we should target to break even. So currently team has been put in place Pan India now and once south and east will also start delivering.
In terms of revenue I think we should see next year will be key for bathware.
Shivani Tanna
Okay, what was the revenue in the current quarter?
Nihar Chheda
13 crores.
Shivani Tanna
Okay, thank you. I’ll join back in the queue for the pending questions. Thank you.
operator
Thank you. Anyone who wishes to ask a question may press star and 1. The next question is from the line of Sneha Talreja from Nuama Wealth. Please go ahead.
Sneha Talreja
Good morning team and thanks a lot for the opportunity. I’m not sure if you have, you know already said this so apologies for the repeated ask. Just wanted to understand on the PVC price front although we understand that is China has you know stopped exports, rebate but any other reason for sudden sharp increase in PC prices that you’re seeing and where do you see this PVC prices moving up? That’s the first one.
Nihar Chheda
I think. One is of course the the reason of China and the government, Chinese government announcing that they will stop subsidizing the exports out of China. And secondly we are also seeing lower arrival of imports in general. What I am seeing at a macro picture is that industry is consolidating. Both manufacturers as well as traders of pvc. Both are consolidating and I feel smaller players, even some medium sized players are also really struggling in this kind of an environment. So while operational performance we are far from where we want to be in terms of the desired state but still being a debt free company and still managing even a low single digit kind of volume growth in these times we believe that this consolidation will continue to happen.
Going forward, both for processors and for the traders of pvc. So I think that’s as far as the lower arrivals of PVC are concerned. But going forward I think more stability, less volatility. I think everyone knew that in the 60s it was not going to be sustainable. Eventually production cuts would start across the globe for PVC raw material. So now that we have crossed this kind of 70 rupees per kg I think it should now be range bound. That is what we are hoping for going forward.
Sneha Talreja
You feel the largely now PVC price hike is done with and largely fixed prices should stabilize here?
Nihar Chheda
I think there is some upside in the short term but I am talking slightly more macro that it will now be. See it’s a commodity, it will never stay flat for a long time. You will see up and down but it will be range bound. You will not see demand. There will be some of the.
Sneha Talreja
I don’t know, I’ll make you. Yeah, so second question from my end was just wanted to you know, ask. You also have given guidance on double digit volume growth now both in 27 as well as of course, you know, quarter four is given. But this is largely coming on the back of restocking or are you seeing in general demand pick up and if there’s demand pickup, could you also highlight that it is real estate driven, infra driven or even agree driven?
Nihar Chheda
Yeah, see restocking is always going to be a one time phenomena. Let me be very clear. But what is good is that now, you know, last year or for the nine months of this current financial year, dealers were just hesitant from keeping inventory. Right. So that always led to a disconnect between primary and secondary was not reflecting each other. So going forward I believe now distributors are not hesitant to keep inventory. So whatever the actual demand scenario is, our primary numbers will also be a reflection of that. Of course agri, this is the season and I think it’s on a low base because last year agri season was not great owing to the unseasonal rainfall and all of that.
So I think agri will do well because still despite this upside of PVC we are still. PVC prices continue to be affordable. As a result, agri pipe prices also continue to be affordable. So I think agri should do well and I think real estate, okay, you have had a couple of quarters up and down but we are still in a good cycle, healthy cycle of real estate. So in general we feel that industry growth will be good. And to add to that, I still believe that in these nine months, whatever Data points I have while interacting with my sales team, my channel partners and my vendors, I feel that there has been extreme consolidation that has taken place in these nine months.
If you see the largest player or even our kind of finished good pricing, the gap with the unorganized players is virtually gone now. So people are preferring to the switch from unorganized to organized has become easier because that price gap is no longer there. So I think with economies of scale coming in, growth coming in, operating leverage kicking, I think going forward large players will continue to grow, industry will grow. But more importantly, consolidation will again play a large role in FY27.
Sneha Talreja
Lastly, Neha, just on the pricing front, have you taken any pricing cuts in the market to now be more competitive? Given both the leaders are, you know, following similar strategy on ground. Have you also taken any price corrections there? That was, that was last one.
Nihar Chheda
Yeah, we have. Especially in CPVC with Smart Fit plus we have become more competitive and that has resulted in good growth in quarter three. And I think going forward more interest. I’m not more interested on the quarter on quarter game but on a medium term in CPVC and PVC we have become more competitive also with two new plants coming in in Begusarai and Telangana. The freight benefits also have been passed on to the channel partners and we have, you know the entire benefit of decentralization we have passed on to the channel. So yeah, we are clearly market share is the priority right now.
And that is already reflected in the Q3 numbers and going forward both for PVC and CPVC and apart from this, we are in this quarter, we are launching a few new products as well. Some value added products which will be able to sort of complement our core product portfolio. Well.
Nihar Chheda
Thanks. Thanks a lot team and all the best.
Nihar Chheda
Thank you.
operator
Thank you. The next question is from the line of Varun Jilasaria from BNK Securities. Please go ahead.
Varun Julasaria
Yeah. Hi sir. I just wanted to understand. On the interest cost we have recorded a interest subvention of 6 and a half crores. So is it fair to say this is just a document and not like a subsidy which you have received?
Anand Gupta
This is related. So this is related to Bihar plant where the government has given interest subvention subsidy. And that application we have already filed and that application has been accepted by the government. Based on that we have recorded the subvention what we are eligible for.
Varun Julasaria
Yes. That means it will be recorded later, right? I mean yeah.
Parag J. Chheda
Cash realization will be done at the time of grant. The recognition of income has been done.
Varun Julasaria
Okay. And so what is the kind of margin that we are aiming for for the next quarter and for the upcoming year like given that you know we have reduced our prices as well and is kind of a price for which is going on. So like what is the kind of margin that you think is sustainable? Maybe excluding the basket losses for the price division.
Nihar Chheda
I think a 10 to 12% EBITDA excluding bathware loss for next year is what we are targeting.
Varun Julasaria
Okay sir, that’s it. Thank you.
operator
Thank you. The next question is from the line of Praveen Sahai from Prabhudas Leeladar Capital. Please go ahead.
Praveen Sahay
.Yeah hi. Thank you for opportunity. My first question related to the CPVC. Now as you had mentioned that now lubrisol tie up you are moved down. So in that do you have other tie up for the CPVC ration domestically or internationally? Now for procurement
Nihar Chheda
Yes.
Praveen Sahay
So domestically or internationally you are procuring cbvc?
Nihar Chheda
Both. Now we are completely flexible like we were before the lubrizole tie up. So now CPVC what people need to understand is it’s a commodity like PVC. So there is not much differentiation between two players anyway there are limited number of players so and we are now our CPUC volumes also fairly large. So we cannot depend on only one or two players. We buy domestic and we import the way we do for PVC. And I think going forward PVC CPVC also not going forward but it is already commoditized with the kind of huge supply of CPVC that is coming in CPVC raw material coming in locally.
So we will rely on multiple vendors both domestic and import.
Praveen Sahay
Second question is related to the volume as you had highlighted a high double digit volume growth in the CPVC quarter and also you had mentioned that now you have a material contribution of a CPVC in total volume. So it’s a fair to assume the PVC segment has the degroom for a quarter. And if that is then what’s the major reason for that?
Nihar Chheda
For December quarter PVC has. PVC segment has degrowth and PVC has grown. Major reason is destocking and we saw a huge decline of PVC prices in November and December. So that has been the key reason for.
Praveen Sahay
Sorry, go on. Sorry.
Nihar Chheda
Yeah, please go ahead.
Praveen Sahay
No, so I’ll just asking that there is a no impact of a Bihar facility in the quarter because your capacity has increased.
Nihar Chheda
Yeah, I think if you look at quarter 4 utilization at Bihar has ramped up very well Better than what we had in bizarre Q3. The headwinds of demand were such across industry You’ve seen de growth I think nine month period for pvc. You would I believe that the industry has degrown by mid single digit for PVC specifically. But you know we don’t put up capacity given 1/2 or 2/4 view of where raw material prices are. We put up capacity with the long term view of where the industry will be and where specifically we see principles in terms of the industry growth and going forward.
You know we are going through a very strong sales transformation journey where we are focusing on digitizing our value chain. We already have distributor management systems and salesforce automation where we are improving productivity of our retailers at the secondary level and improving productivity of our sales team our feet on street. So given these kind of initiatives and our new campaign of India Ki Pragati Ka Taj where we are again investing heavily in the brand with all these initiatives we feel that industry will grow over next five years and we will be one of the leaders of the growth in the long term.
Praveen Sahay
Thank you for answer. The last question is related to the working capital. Definitely from the peak of second quarter 25 now you have reduced significantly. So where you want to bring this number 66 days where to go and especially you know inventory number. So inventory from 93 to 76 so far. So where you are seeing this number to go down.
Anand Gupta
So we’ll have to see both the inventory and debtors very differently. We have as I said we have lot of scope in improving our data days and we are working on it. And there are eight to 10 days possibilities there which in a nine to 12 month it should happen. But mid-40s is something what we are targeting in next six months I think inventory is at 76 and it will remain in the range of 70 to 75. So I don’t see much room over there because we will maintain inventory at that level. And payables is around 60 which is a function of how do you procure and from where you procure.
So it will. It will vary slightly but within the same range. So we have scope in debtor days and it should translate in next three to six months more. 66 should be between 60 to 65 in a longer run.
Praveen Sahay
Okay. Okay. And one clarification for Bihar government, you know interest submission, that’s entire amount we had booked or there is something left.
Anand Gupta
So we have booked to the extent what we have spent. The policy says that there is a limit of subvention. We have not fully utilized the limit. As we’ll keep spending on our interest cost it will keep arising. But to the extent of 10 crores. It will not go beyond as the policy mentions. So we have booked to the extent what we have, what we have spent. And at the same time this will have two effect. One be in PNL and the other in fa. And based on that we’ll bifurcate right now we have put in P and L.
Praveen Sahay
Okay. Thank you sir and all the best.
Nihar Chheda
Thank you.
operator
Thank you. The next question is from the line of Priyanshu from Investech. Please go ahead.
Unidentified Participant
Good morning team. Couple of question from my side. Just to clarify on that PVC prices are started moving up. So what will be the import price parity as per the management estimations? Can you just please guide on this?
Nihar Chheda
I did not understand the question. Could you please repeat?
Unidentified Participant
Hello. So the PVC prices are started moving up. So what will be the probable increase in the PVC prices in India near term? And what will be the import price parity for the PVC prices?
Nihar Chheda
So going forward PVC will be range bound. And there is not much of a gap between domestic and import right now. So currently imports are available at the similar price of what Reliance is priced today or at a slight preview.
Unidentified Participant
And second one is a bookkeeping question. So what is are agree and non agree mix and how we expect this going to be in near term?
Anand Gupta
So agri is in the range of 30 to 35%. This is what the usual range is and it will remain as it is in our portfolio.
Nihar Chheda
This is on a 12 month basis. It’s a seasonal business. So quarter four and quarter one is slightly more heavy. But like Anand said on a 12 month basis 30% is the range for agri contribution in value terms.
Unidentified Participant
Sure. Yeah. Thank you. That’s all from my side.
Nihar Chheda
Thank you.
operator
Thank you. The next question is from the line of Karan Gupta from ASIT C Mehta Investments. Please go ahead.
Karan Gupta
Yeah. Now what’s the spread between PDC pricing and cppc?
Nihar Chheda
I think there’s some disturbance on your end.
Karan Gupta
Hi, what’s the pricing spread between PVC and cpvc? Now.
Nihar Chheda
Are you talking raw material or finished? Good. Around 25 rupees.
Karan Gupta
Okay. And just one on the cross margin side, what’s the reason? Basically.
Nihar Chheda
I think there’s a lot of disturbance on your end. I’m not able to hear.
operator
Yes Karan, there’s lot of disturbance on your side.
Karan Gupta
Just a second. Now I think it’s clear. Just one question. On the gross margin side, what’s the reason for increase in 3% in the gross margin side.
Nihar Chheda
What is the reason.
Karan Gupta
For gross margins Increase.
Nihar Chheda
There was a large inventory loss.
Anand Gupta
Okay. And if you are talking about sequentially 72 to 75 that is what I’m trying, I’m understanding means 3% sequential quarter or yoy. Okay. So as I had mentioned in the at the start of the call we have around 18 to 20 crores of inventory loss which.
Nihar Chheda
So. So basically last December quarter inventory loss was much higher compared to what it is in this December quarter. So there still margins are not normalized because there was an inventory loss. But last December quarter the inventory levels were significantly higher which is why inventory loss was major this time. Now inventory is much under control so we are not immune to the decrease in PVC prices. And we have seen inventory losses across the industry. But for us it has been lower YoY because the inventory now has been under control. And also second is product mix has improved.
Our focus going forward is more on value added products like CPVC and few other new product launches that we have undergoing currently. So product mix will improve and inventory losses going forward should go away.
Karan Gupta
Okay. And what’s the capacity utilization right now? Overall
Anand Gupta
Around 50 to 52% of asset utilization is there on production capacity.
Nihar Chheda
Okay. And going forward, I mean in FY27 probably you are expecting it will improve because of the channel inventory. Will improve.
Nihar Chheda
Yeah. So one is the channel inventory is moving up and second is of course overall demand being better. And third is industry consolidation where larger brands like ourselves will outpace the smaller players like we have seen in these current nine months as well. So going forward there is no major additional capacity addition plan. Focus in next financial year will be on juicing out the assets especially the new plants of Telangana and Bihar. Thank you.
operator
Thank you. Anyone who wishes to ask a question may press star and one. Now the next question is from the line of Vignesh A from Sequent Investments. Please go ahead.
Vignesh Iyer
So thank you for the opportunity. My question is wanted. We. I wanted to understand at what revenue level would our backware segment break even?
Nihar Chheda
Around 80 to 100 crores per annum. So around 30 crores. 25 to 30 crores per quarter.
Vignesh Iyer
Okay. Okay, got it. And so. So what is that Sim is your earlier the early commentary that you gave. I wanted to understand what is the total PVC price rise that we have seen in last one month?
Nihar Chheda
Around 11 rupees.
Vignesh Iyer
Okay, got it. Yeah. That’s all from my side. Thanks.
operator
Thank you. The next question is from the line of Asim from DAM Capital. Please go ahead.
Aasim Bharde
Yeah. Hi. So just wanted to understand your capex plans for the next three years. So pipes as you nothing is needed because your utilization might be at around 40 41% this year. On the bathware side like is there any capex plans that you are planning to, you know maybe in house manufacturing. Can you just talk about that and how much you might spend and on the pipes bit also at what level of utilization would you start planning for future capital?
Nihar Chheda
So Akwil, we are under process of acquiring the manufacturing unit which should happen this year which will be a capex of around 40 crores. So total and then incremental 5 crores to debottleneck the plant and more maintenance at the plant. So around 45 crores on bathware and then we will be able to manufacture a significant amount of range in house as far as pipe is concerned. You’re right. Next year there will not be much capex. All the capex will be towards new product introductions within the piping segment and whatever maintenance capex that we do every year.
So next year capex will be for piping mainly towards maintenance and new product. New pipe range that we are bringing in. That’s about it. I think typically around 65% capacity utilization is when we would look at further capacity addition because last four years we have done heavy capacity additions. And what you must realize is now we have significant land bank at Jaipur, Telangana and Begu Sarai. So we may not need more greenfield units. In the short term we have enough land bank to increase capacity at Jaipur, Telangana and Bihar. And these are all strategically located because Jaipur can cater to demand in north and west.
Telangana as a hub for south and Bihar as a hub for eastern part of India. And now that you see our manufacturing footprint we have one or two plants in every zone. So there is no glaring vacuum in terms of manufacturing footprint. So yeah, I hope that answers your question.
Aasim Bharde
Yeah, on the pipes but so for bathware you mentioned around 45 crores you might spend next year all put together. Do you have a similar number for. Sorry, do you have a number for the pipes but the maintenance and the new products what how much you would plan to spend?
Anand Gupta
So for all the eight plants the replacement and maintenance capex will be in the range of. I’m talking about FY27 right now it will be in the range of 70, 75 crores. And as Nihar mentioned there will be opportunities where new product developments will be there within piping and it will be over and above what I mentioned.
Aasim Bharde
Okay but this should. I mean even. I know you just mentioned for FY27 but even for 28 I think a similar number should be the target, right?
Nihar Chheda
Maintenance capex. Yes, Maintenance Capex. Yes, that should be the range but you know capacity addition, let’s see how FY27 plays out. I am bullish in terms of growth so yeah, I think at around 65% capacity utilization is when we will start looking at further capacity as and when that happens.
Aasim Bharde
Okay, thank you. Thank you very much. Thank you.
Nihar Chheda
Thank you.
operator
Thank you. The next question is from the line of Shravan Shah from Dalit Capital. Please go ahead.
Shravan Shah
Sir. First of all, sorry I joined the late. I was on another call so just to even if you have answered I’m trying to maybe asking the same thing again. So broadly in terms of the volume front for fourth quarter how much volume are we are we looking at? And for next year how are we looking at the volume growth?
Nihar Chheda
So we are in the middle of the quarter so I will stay away from putting a number but January we have seen high double digit growth and I am bullish that this will continue for February and March. Restocking is just one part but overall sentiment in the channel has improved. We are more price competitive across CPVC and PVC and with new capacity already there at Pegusarai we are confident of good growth not only for fourth quarter but for next financial year.
Shravan Shah
So next year also kind of 8, 10% kind of a growth is doable.
Nihar Chheda
Yeah, we are aspiring for higher than that. But I will guide conservatively that 8 to 10% is something we have to do. We have no choice.
Shravan Shah
Yeah. And on the margin front we said that 10 to 10% is now doable on a sustainable basis.
Nihar Chheda
Yeah. X of inventory gain and loss sustainable margin should be 10 to 12%.
Shravan Shah
And this quarter or maybe nine month what was the inventory loss?
Parag J. Chheda
So this quarter is 18 to 20 crores. Yeah. Yeah. December quarter Q3.
Shravan Shah
Okay. And and from first January 7 rupees PVC price hike and maybe from today also another one and a half rupees. So out of this seven rupees how much we have pass on to the customers? Till now.
Nihar Chheda
We have fully passed on.
Shravan Shah
Okay. So maybe the entire one can look at in terms of realization QQ improvement should also be there. That should support in terms of the margin for fourth quarter coming closer to what we are we are looking at kind of a 10% plus.
Nihar Chheda
Yeah see but the realizations I think PVC prices in last Q4 also were in a similar range if not higher. So it were maybe around 78 to 80 rupees in from January to March of last year. This price increase that we are talking about is sequential from December quarter to current quarter.
Shravan Shah
Yeah. So from 5, from 5% margin in third quarter it should be then coming back to a 10% plus kind of a number for fourth quarter. That’s the normal expectation one can have.
Parag J. Chheda
Correct.
Shravan Shah
Okay. Okay, got it. And, and in terms of overall you mentioned that in nine months how much capex till now we have done and for full year how much we are looking at.
Anand Gupta
So nine months we have done 160 crores and including actual, we expect another 60 crores, 60, 65 crores in Q4.
Shravan Shah
So for total, in totality 120 watt corrode CapEx should be there for 225. Okay, okay, okay, got it, got it. And, and currently the net date would be the similar 190 odd.
Anand Gupta
Net debt. Yeah. So net debt is around 160 kind of one. So it’s a gross debt. So net debt is neutral. Means we have enough cash to make sure that we are almost neutral on net debt position.
Nihar Chheda
So net debt, we are almost net debt free as we speak.
Shravan Shah
Okay, okay, got it, got it. And bath fare. In terms of break even we would be. Last time we said by Q2 once we have a 2530 crore kind of revenue we should be having a break even. So is there any change in that stand?
Nihar Chheda
Yeah, maybe 1/4 lag. So maybe September to December is where we should hit that number.
Anand Gupta
Okay. And then the ad spend that for nine months how much we would have done so 1.2% of the revenue. That is.
Anand Gupta
Yeah, we are continuing with 1.5% kind of around 25 crores is what we have spent in nine months.
Nihar Chheda
So you know in this kind of times I would just like to add that obviously it is nine months have been tough for industry and for us but we have still stayed aggressive in terms of investing in the brand because it’s some perception building that has to be done on the long term. And given the strength of our balance sheet, even if margins are under pressure or you know growth is under pressure, we will stay true to Investing, you know, one and a half, 2% back into the marketplace.
Shravan Shah
Got it. And you also mentioned that the now the focus would be first to utilize the Bihar and rest of the plants and then maybe after two, three years we can look at in terms of the expanding the capacity.
Nihar Chheda
Correct.
Shravan Shah
Okay. Okay. Yeah, more or less. I’m done. Thank you. Thank you.
Nihar Chheda
Thank you.
operator
Thank you. The next question is from the line of Keshav Lahoti from HDFC Securities. Please go ahead.
Keshav Lahoti
I said if I remember earlier, we are targeting a 12% EBITDA margin. Now we have made it, you know, a broader range of 10 to 12. Why is that so?
Nihar Chheda
So as you’re aware in the industry has. Has increased.
Keshav Lahoti
Okay.
Nihar Chheda
And with capacities coming in, our focus is on growing volume growth. But you know, with volume the. The way our industry is, the more we grow, the more profitable we will be. So it’s just out of prudence that we are saying 10 to 12%. But you know, given decentralization benefits, improvement in product mix and operating leverage, margins can positively surprise next year as well. But I think we are just being slightly conservative.
Keshav Lahoti
Understood. Got it. And when you say the competition intensity has increased, is it more from, you know, organized side or unorganized side? And secondly, what are the thoughts? This is the new normal competition intensity or possibly it will ease out from here.
Nihar Chheda
I think it will ease out because it was challenging times for everyone, which is why. So first, to answer your first question, it was more from the large players, unorganized players like I mentioned at the beginning of the call are exiting the market. They are having a kind of a natural death because large players like ourselves itself have become so aggressive in the market. So we have seen immense consolidation. So while in nine months we have only grown by 2% in volume terms, industry has still grown de grown by maybe anywhere around 6 to 7%.
So going forward I think competition competitive intensity will ease out amongst the larger players because overall industry will grow. So there will be no need for this kind of predatory pricing. But anyway, given that now in CPVC we have our indigenous compounding with Smart Fit plus and pvc, the kind of better tailwinds going forward, I think we are well equipped to compete in this market.
Keshav Lahoti
Got it. That is helpful. Thank you.
Nihar Chheda
Thank you.
operator
Thank you. The next question is from the line of Priyanshu from Investec. Please go ahead.
Unidentified Participant
Thank you for follow up. So I just want to understand about the inventory gain which we will reverse in the quarter four from the inventory lost which we already have booked. Given the input, prices are rising now. So can you just guide on this?
Nihar Chheda
I think see inventory gain or loss one should not focus on. We don’t focus on much internally as well because it’s a very tactical part of the business. On a 12 month basis inventory gain or loss should even out. And while price increase of 10 rupees has been sharp and it has led to restocking, but we must remember that prices have come back to 70 rupees even the decrease of 10 rupees happened in November December. So prices have only now normalized. So I will stay away from speculating on inventory gain or loss. What is better is that now that sentiment has improved, channel is restocking.
So I think that is more important than the inventory gain or loss because like I said on a 12 month period this will even out. So going forward, decentralization benefits, product mix improvement and operating leverage, these will be the more sustainable levers for margin expansion.
Unidentified Participant
Okay, sure. Thank you. That’s all.
Nihar Chheda
Thank you.
operator
Thank you. Will take the last question from the line of Arun Ved from Isaac Services. Please go ahead.
Unidentified Participant
Neha, just on the guidance front you mentioned 10 to 12% margins in our PVC pipe business and the volume growth at 8 to 10%. I know you’re trying to say I’m conservative but that’s okmoron because neither you’re talking of volume growth coming through because of competition. Neither. If we’re talking of margins coming through competition and we are talking of backward, the backward integration to some extent because of compounding the product mixed and different plants, it’s not adding up. Can you please help us reconcile that?
Nihar Chheda
I have not said 8 to 10%. The participants said 8 to 10% to which I have agreed that that that is the bare minimum we have to do. But I am not guiding at 8 to 10%. That is what the person asking the question said. And I said that is the bare minimum that we need to do. Of course and I also said that we are assessing aspiring for a much higher volume growth than 8 to 10%. But that’s the bare minimum that we have to do. So that’s not a guidance from the company.
Unidentified Participant
And on the margin front, why 10 to 12%? Because historically even the last quarter it was 12% which you are harping upon and now we have much more benefits coming through. Why that has been brought down? I know competition was there in last quarter. Anything has changed there, particularly this year.
Nihar Chheda
Nothing has changed. Competitive intensity is as you know is there. So on margins we are being conservative. I think product mix is improving, decentralization benefits will come in and operating leverage will come in with kind of good volume growth. So these are going to be the three levers. And you know we are not happy with 10 to 12%. We are just being conservative. Of course aspiration is is much higher.
Unidentified Participant
Yeah, but it has to be said also to some extent because when we hear it sounds as if nothing is good. That’s the article anyways, thank you.
operator
Thank you Ladies and gentlemen, in the interest of time. That was the last question. I would now like to hand the conference over to the management for closing comments.
Nihar Chheda
Thank you. Thank you, everyone.
operator
On behalf of Prince Pipes and Fitting Limited, that concludes this conference. Thank you for joining us. And you may now disconnect your lines.