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* The fourth quarter marked a sharp recovery phase for the plastic pipes industry. While Jan-Feb’26 saw gradual improvement in plumbing demand, infrastructure activity, and channel restocking, recovery accelerated sharply in Mar’26 as PVC resin prices surged to ~USD1,150/MT (+64% YoY/+85% QoQ) amid global supply disruptions and West Asia tensions, triggering aggressive advance buying and inventory-led stocking.

* However, 1QFY27 may remain challenging due to the sharp ~24% correction in PVC prices from Mar’26 levels after the temporary import-duty removal. Leading organized players are still expected to deliver healthy ~15% YoY volume growth in FY27E, supported by resilient plumbing demand, infrastructure recovery, premiumization, and continued industry consolidation in favor of branded players.

* The volatile FY26 environment also accelerated key structural industry shifts, including premiumization and industrial applications, rising investments in branding & distribution, decentralized manufacturing expansion, and backward integration initiatives. With India likely to remain structurally PVC-deficient over the medium term, organized players are well-poised to benefit from stronger consolidation and a healthier growth cycle ahead.

* Hence, we expect a notable upside for our coverage companies, as major headwinds are largely behind us and growth visibility is improving in FY27. We reiterate our BUY rating on ASTRA (TP: 1,950 – SoTP), SI (TP: INR4,320), and PRINCPIP (TP: INR320).

Strong 4QFY26 driven by PVC inflation, restocking, and market share gains

* The fourth quarter marked a strong recovery phase for the plastic pipes industry. While Jan-Feb’26 saw gradual improvement in plumbing demand, channel restocking, and infrastructure execution across segments such as Jal Jeevan Mission and city gas distribution, recovery accelerated sharply in Mar’26 as PVC resin prices rebounded to ~USD1,150/MT (+64% YoY / +85% QoQ). The revival happened amid global supply disruptions and West Asia-related tensions, triggering aggressive advance buying across the channel.

* PVC resin prices surged ~64% YoY during the quarter amid global supply disruptions, West Asia-related geopolitical tensions, elevated crude prices, and tighter petrochemical supply conditions. This sharp rise triggered advance buying and inventory replenishment across dealers and distributors after multiple quarters of lean inventory levels.

* Leading organized players posted healthy double-digit volume growth broadly due to channel restocking in Mar’26 amid a spike in PVC prices. Organized companies continued to gain market share from regional and unorganized players as companies passed on the inventory gains for higher volume. In contrast, CPVC remained one of the fastest-growing segments (with several companies reporting ~35-40% YoY growth) driven by robust plumbing demand and premium housing activity.

* Profitability improved sequentially for most organized players, aided by operating leverage, richer product mix, and inventory gains arising from higher PVC prices. Management commentary also turned materially more optimistic, with companies indicating healthier demand recovery trends across housing, infrastructure, and rural markets, setting the stage for stronger growth expectations and a brighter sector outlook in FY27.

Valuation and view

* PVC pipe players witnessed a highly volatile FY26 due to sharp PVC price fluctuations. The year began with weak 1Q volumes (early monsoons), followed by a steady 2Q (stable prices and decent growth), a mixed 3Q (healthy volumes offset by lower realizations), and a strong 4Q recovery (sharp PVC price rebound and channel restocking). While ASTRA and SI continued to outperform industry volume growth, profitability in 1Q and 3Q was hit by inventory losses and lower realizations. However, 4QFY26 witnessed a sharp margin recovery supported by inventory gains and operating leverage.

* While the sharp correction in PVC prices after Mar’26 levels could create nearterm realization pressure and inventory losses in 1QFY27, the broader sector outlook remains constructive, aided by improving housing and infrastructure demand, continued market-share gains by organized players, premiumization toward value-added categories, and easing competitive intensity across the unorganized segment.

* Assuming this, we expect a meaningful upside for our coverage companies, with aggregate volume/revenue/EBITDA/PAT CAGR of 15%/17%/23%/30% over FY26-28. We reiterate our BUY rating on ASTRA (TP: 1,950 – SoTP), SI (TP: INR4,320), and PRINCPIP (TP: INR330).

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