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In 2QFY26, we estimate our coverage companies’ aggregate revenue and EBITDA to grow by ~6-7% YoY, while PAT is likely to be broadly flat owing to higher depreciation and interest cost. We expect the tiles industry to have witnessed low-single-digit YoY demand growth. With export demand likely to remain subdued over the near term, surplus supply is being diverted to the domestic market, thereby increasing pricing pressure and weighing on realisations. However, cost optimisation by the leader can drive margin improvement. In the wood panel segment, demand improved in Aug’25, mainly driven by reconstruction activities post heavy rains in many parts of the country. Concerns over MDF overcapacity and timber prices are gradually easing. With structural changes in play, organised/branded players are gradually gaining market share from unorganised players. In the plastic pipes segment, PVC prices increased 5% sequentially (declined 12% YoY) in 2Q and are currently trading at ~INR76/kg. Restocking activities across the channel are expected to improve once prices stabilise, with further support from regulatory tailwinds (like implementation of ADD and BIS norms). We prefer Supreme Industries, Kajaria Ceramics and Century Plyboards in our coverage.

* Tiles demand remains subdued: We expect the tiles industry to have witnessed low-singledigit YoY demand growth in 2Q owing to continued domestic weakness and stiff competition. Export growth, which had earlier supported smaller industry participants, has moderated amid global trade headwinds. Competitiveness has been impacted by EU ADD, US trade tariffs and elevated logistics costs arising from the Red Sea crisis. With export demand likely to remain subdued over the near term, surplus supply is being diverted to the domestic market, thereby increasing pricing pressure and weighing on realisations. For 2QFY26, we expect tiles companies to report YoY growth of ~20% and ~22% in EBITDA and PAT, respectively. For Kajaria, cost-optimisation initiatives, savings from shutdown of UK operations and plywood division are likely to drive profitability.

* Strengthening of demand in wood panel; concerns over timber prices gradually easing: We believe demand for wood panel products has strengthened from Aug’25 owing to reconstruction activities post the heavy monsoon. Concerns over MDF overcapacity and timber prices are gradually easing. With structural changes in play, organised/branded players are gradually gaining market share from unorganised players. On the pricing front, several leading domestic MDF manufacturers have announced a price hike of up to ~5% across various product categories w.e.f. 1 st Sep’25, which was primarily led by rising production costs. Aggressive capacity additions in particle boards are expected to continue to pressure margins in the near term. Overall, we expect wood panel companies to register revenue/ EBITDA growth of 11-12% YoY in 2QFY26.

* Plastic pipes - strong volume growth across companies: In the plastic pipes segment, PVC prices increased 5% sequentially (declined 12% YoY) in 2Q. Open market prices are currently trading below RIL’s levels (~INR76/kg), as traders are carrying elevated inventory and are compelled to liquidate holdings to finance incoming supplies. Restocking activities across the channel are expected to improve once prices stabilise, with further support from regulatory tailwinds (like implementation of ADD and BIS norms). Astral and Supreme Industries (including Wavin) are likely to register high teens and mid-teens volume growth, respectively. For 2QFY26, we expect revenue growth of ~5% YoY; however, we expect EBITDA and PAT to decline ~4-10% YoY.

* 2QFY26 likely to be a steady quarter: We estimate that our coverage companies’ aggregate revenue/ EBITDA could grow by ~6-7% YoY, while PAT may be broadly steady YoY owing to higher depreciation and interest cost.

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