Captain Pipes, one of the leading firms in the PVC pipe industry, has seen its share price on Dalal Street increase tremendously in a short period of time, establishing itself as one of the most significant wealth generators in recent history.
The company’s stock, which was selling at Re 0.65 four years ago, has increased by 2823% to its current market price of ₹19. This exceptional record includes outstanding annual returns, with gains of 345% in CY21, 427% in CY22, and 22% in CY23.
In May 2023, the stock surpassed the ₹35 barrier and reached an all-time high of ₹36. However, it subsequently saw massive profit booking, resulting in a 47% drop in value from its high.
Since March 2, 2023, the company’s shares have traded ex-bonus (2:1 and ex-split (1:10). Before this corporate action, the stock was worth ₹640 each.
The company provides a wide selection of PVC pipes and fittings for various agricultural and plumbing applications. Its product offerings include agricultural solutions such as column pipes, pressure pipes, and agri fittings, as well as plumbing solutions such as uPVC pipes, CPVC pipes, and SWR pipes and fittings.
Captain Pipes has experienced healthy growth in recent years, thanks to expansion initiatives. The company’s turnover has shown an increasing trend, supported by government incentives provided to agricultural industries.
Furthermore, the company has expanded into solar and greenhouse activities, which are also aided by government funding. However, it faces significant pricing rivalry from peers as well as challenges from the global financial crisis. With nearly 30 years of experience in manufacturing and international marketing, the company’s customer base has constantly grown.
The corporation has approved a fundraising initiative of ₹20.6 crore. The board approved the issuing of 1,25,00,000 preferential shares to investors at ₹16.5 per share. The issuance is subject to shareholder approval at the Extraordinary General Meeting (EGM) on January 23, 2025.
Revenue declines in Q2 amid weak demand.
In Q2 FY25, the company’s revenue from operations decreased by 24.6% year on year to ₹12.61 crore, from ₹16.72 crore in the same quarter last year. This considerable fall was principally caused by decreased demand in both the agriculture and construction sectors, which was attributed to an extended and harsh monsoon season in most regions.
Despite a revenue reduction, the company’s EBITDA improved by 4.7% year on year, rising from ₹1.69 crore in Q2 FY24 to ₹1.77 crore in Q2 FY25, led by a 392-basis point improvement in margins. However, in Q2 FY25, profit after tax (PAT) decreased by 18% yearly to ₹0.85 crore due to increasing finance expenditures.
During the quarter, the business advised investors that the construction of its new plant near Ahmedabad was proceeding as planned, with completion slated in December 2025. This plant, with a production capacity of 20,000 MTPA, is expected to help the company achieve its expansion goals and improve its manufacturing skills.
