Listed plastic pipe makers are in a difficult spot. The much-awaited announcements on anti-dumping duty (ADD) and Bureau of Indian Standards (BIS) rules aimed at curbing low-quality polyvinyl chloride (PVC) resin imports did not materialize this year. The absence of these trade protection measures has opened the door to cheaper imports, particularly from China, eroding the market share of domestic players.
Sustained dumping is also feared to push PVC prices further down, increasing the risk of inventory losses for companies. PVC price movement is critical for plastic pipe makers, as dealer destocking and restocking cycles hinge on this. At the same time, the industry is grappling with demand weakness, high competition, and rising capacity additions.
“Heavy imports and low domestic demand led to PVC prices dropping significantly over the last few quarters. With no ADD or BIS enforcement, PVC prices (now at $630/metric tonne) have already declined 5% since then, further maximum fall of another 2-3% can be expected, led by continued dumping,” said Meet Jain, analyst at Motilal Oswal Financial Services.
Current inventory levels are unusually low due to uncertainty around BIS and ADD, but should normalize at lower levels as price volatility eases following the non-implementation of these measures, he added.
So, steeper earnings downgrades are likely if PVC prices remain under pressure. Here, larger players such as Supreme Industries Ltd and Astral Ltd, which saw year-on-year volume growth of 17% and 20%, respectively, in Q2FY26, appear better placed.
“We reckon the least earnings per share cuts for Astral and Finolex Industries followed by Supreme (for FY26/FY27/FY28), whereas Apollo Pipes Ltd and Prince Pipes and Fitting Ltd are likely to face more pressure given recent capacity additions would drag profits as they struggle to compete against the price war by Supreme and Astral,” said a Nuvama Research report.
After a seasonally weak Q2FY26, management commentaries pointed to stronger volumes in H2FY26 compared with H1FY26. The up move was expected to be driven by post-monsoon recovery in residential and agriculture, construction and higher government spending on water and infrastructure. But some of this optimism also hinged on ADD imposition pushing volumes.
For instance, Prince Pipes guided for high single-digit volume growth in FY26 with double-digit margins by Q4FY26 considering ADD is levied. Supreme’s pipe volume growth guidance for FY26 is at 15-17% and Astral eyes double-digit volume growth with 16-18% margin in the pipes business. However, a lingering worry now is volatile PVC prices could weigh on profitability at least in the December quarter (Q3FY26).