The tide seems to be turning in favour of listed plastic pipes makers after a rough first nine months of FY26. Prices of raw material polyvinyl chloride (PVC) were volatile globally for much of FY26 amid weak Chinese demand and oversupply.
This also had a bearing on domestic prices. Following a steep fall in December, PVC price is now inching up.
On an average, domestic PVC prices have improved from multi-quarter low of ₹71.96 per kg in Q3FY26 to ₹73.87 in the March quarter (Q4FY26) so far.
Movement in PVC prices is crucial for pipe companies as it dictates destocking/restocking of dealer inventories. So, lower PVC prices led to inventory losses for plastic pipe companies in Q3FY26, prompting various brokerages to cut earnings estimates.
However, recent dealer checks and interactions with pipe manufacturers by Yes Securities indicated with rising PVC resin prices, there has been a strong inventory restocking. The end-demand continued to remain subdued, and dealers had below-average inventory till mid-January.
Also, China’s proposal to curtail PVC export subsidies, effective 1 April, would accelerate channel restocking. Reducing the competitive advantage of low-priced Chinese exports bodes well for domestic pipe companies’ market share.
Reduced availability of low-priced Chinese PVC could lift domestic prices by 5-10%, estimates PL Capital, aiding realizations for domestic pipe manufacturers. In Q3, falling PVC prices and aggressive competition had weighed on realizations across the sector.
Volume performance was a mixed bag for pipe makers in Q3. Astral Ltd and Supreme Industries Ltd led with year-on-year growth of 17% and 16%, respectively, helped by their distribution and brand strength.
Prince Pipes and Fittings Ltd, Apollo Pipes Ltd and Finolex Industries Ltd lagged with flat or lower volumes. Management commentaries are upbeat as Q4 is seasonally strong for plumbing and agriculture pipes segments.
Supreme eyes 5-17% growth in pipe volume in FY26. Astral reaffirmed double-digit volume growth guidance. Prince Pipes and Apollo are targeting high double-digit volumes in FY27.
Barring Astral, the stocks of the other pipe manufacturers have fallen 12-25% in the last six months. Delays in anti-dumping duty implementation and Bureau of Indian Standards norms enforcement have also blurred the sector’s earnings growth visibility.
These trade protection measures would have restricted the entry of cheaper imports. For now, with PVC prices heading northward, a sequential revival in Q4 is on cards, but meaningful earnings upgrades would happen only gradually.