(MENAFN- KNN India)
New Delhi, Jan 15 (KNN) India's plastic pipe industry holds substantial growth potential due to its significantly lower per-capita pipe consumption compared to global standards, according to a recent report by investment bank Jefferies.
This untapped market potential positions the sector for considerable expansion, particularly when compared to consumption rates in the US, Europe, and China.
The industry has demonstrated robust performance with an 8 percent compound annual growth rate from FY15 to FY24. Market projections indicate the sector will reach Rs 500 billion in FY25, driven by renewed capital expenditure and a strong housing cycle.
This projection aligns with Techsci Research's valuation of the market at Rs 474.47 billion in 2023, highlighting the sector's crucial role in infrastructure development, including water supply, sewage systems, and gas distribution.
However, the industry faces significant challenges from volatility in polyvinyl chloride prices, a key raw material in pipe manufacturing.
Recent market data shows PVC prices fluctuated from Rs 75 per kg in September 2024 to Rs 78 per kg in November 2024, before declining 4 percent in December.
These price variations can lead to inventory losses and impact profit margins, as manufacturers typically pass through these costs.
The first half of FY25 experienced slower growth attributed to weak capital expenditure activity and high base effects from the previous year.
Nevertheless, Jefferies forecasts a recovery in volumes during the second half of 2025, supported by renewed capital investments and increased business-to-business activity.
The plastic pipe segment has notably outperformed the tiles sector in volume growth over the past two years, a trend analysts expect to continue.
Despite the near-term challenges posed by raw material price volatility, the long-term outlook for India's plastic pipe industry remains optimistic.
The sector's growth trajectory is supported by favorable market dynamics and increasing infrastructure investments, positioning it for sustained expansion in the coming years, according to the Jefferies report.
(KNN Bureau)
MENAFN15012025000155011030ID1109092122
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.