Plastic pipe makers eye earnings revival amid weak demand, policy delays

Subscribe to enjoy similar stories. 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.