Pipe industry to witness subdued growth in Q1FY26, growth likely to remain below 5%: Nuvama Research

New Delhi [India], June 24 : The pipe industry in the country is expected to witness subdued growth in the first quarter of the financial year 2025-26 (Q1FY26), according to a report by Nuvama Research.

The report said that the value growth for the top ten companies in the sector is likely to remain below 5 per cent during the quarter.

It said "Q1FY26 is likely to be relatively subdued with value growth likely to be below 5% for the top ten companies".

The report mentioned that the demand trend has been mixed. While the agriculture segment has shown weak demand, the building materials segment has performed better. This mixed demand pattern is one of the reasons behind the expected slow growth in the industry.

The report also provided updates on BIS certification. Several manufacturers from countries like the US, EU, Japan, Taiwan and Korea have obtained approval from the Bureau of Indian Standards (BIS) for PVC resins.

However, not a single Chinese PVC manufacturer has applied for BIS certification. If Chinese manufacturers fail to obtain this certification, the report noted that PVC prices may go up by Rs 5 to 7 per kg due to limited supply.

Chinese PVC products need a BIS (Bureau of Indian Standards) certificate because it's mandatory for certain products imported into India to ensure they meet Indian standards for safety, quality, and reliability. It also reduces the chances of dumping low-quality products by China.

Another concern highlighted in the report is related to government orders. A major challenge is the delayed payments to contractors by various state governments.

The report highlighted that the outstanding payments worth Rs 200-250 billion are yet to be released, which is affecting the pace of government-funded projects in the sector.

On the supply side, the report noted that with several companies planning capacity additions in chlorinated polyvinyl chloride (CPVC), there could be an oversupply situation in the CPVC segment by FY29.

Meanwhile, the oriented polyvinyl chloride (OPVC) industry is currently valued at Rs 16 billion. It has seen acceptance in about 5 to 6 states. If demand continues to grow, the OPVC industry has the potential to reach a market size of Rs 80 billion by FY31, the report said.

Overall, the report outlined that the pipe industry may go through a slow growth phase in the short term, though new product segments offer long-term growth opportunities.

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