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Domestic PVC resin prices have continued to recover following the sharp correction witnessed during Q1FY27. As per industry checks, PVC resin prices have increased by INR2/kg from 1st Sep’26, taking domestic prices to INR94/kg. PVC resin prices had declined sharply from INR115/kg on 1st Apr’26 to INR80/kg by 1st Jul’26, driven by increased availability of low-priced Chinese PVC, time-bound removal of import duty, and softness in demand. However, reinstatement of import duties has improved the pricing environment for domestic PVC producers. S-PVC imports currently attract 7.5% basic customs duty plus 0.75% social welfare surcharge, implying effective customs duty of 8.25%. In addition, the government has introduced minimum import price (MIP) of US$766/t for S-PVC imports, further limiting the scope for low-priced imports.

We believe the combination of 8.25% import duty and MIP should maintain domestic PVC resin price stability, reduce the impact of low-priced imports and provide greater visibility on resin prices. This should encourage channel restocking and support volume recovery for organized plastic pipe manufacturers.

PL View: Recovery and stabilization in PVC resin prices is expected to be positive for the plastic pipes industry, particularly from a volume and channel inventory perspective. During Q1FY27, sharp resin price volatility led to significant channel destocking, resulting in an aggregate ~16% YoY decline in volumes across our plastic pipes coverage universe. The impact was relatively higher on agri-focused players, as weak agricultural demand and elevated PVC prices weighed on offtake.

However, channel restocking has improved since Jul’26 with the increase in PVC resin prices. The implementation of MIP is expected to limit the impact of low-priced imports and reduce the risk of sharp corrections in domestic PVC resin prices. This could support a recovery in P&F demand over the coming quarters.

We believe Supreme Industries (SI) is well positioned to gain market share, supported by capacity additions, Wavin integration, and a diversified portfolio. The company is adding 50,000mt capacity across Bihar and Jammu, while the acquired 70,000mt Wavin capacity is expected to ramp up to ~70% utilization in FY27. The gas piping business offers another growth avenue, with INR6bn tender opportunity in FY27, supported by rising CGD demand. Over the longer term, exports remain a key opportunity, with the management targeting US$150mn revenue from US$26mn currently.

We estimate FY26–28E revenue/EBITDA/PAT CAGR of 15.8%/18.4%/23.9%, with volume CAGR of 13.5% and ~60bps EBITDA margin expansion. SI is currently trading at 31x FY28E earnings. We value the company at 40x FY28E earnings, implying TP of INR4,610. Maintain ‘BUY’.

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