Q3FY26 Quarterly Results Review : Strong Demand Momentum Follows Healthy Growth by Choice Institutional Equities
Q3FY26: Wood & Bathware Drive Healthy Growth; Tiles Edge up Slightly, Pipes Miss Expectation amid Volatility
Our Building Materials coverage universe, comprising plastic pipes, bathware, tiles, plywood and MDF, delivered a healthy performance in Q3FY26. The Wood and Panel segment (plywood and MDF) recorded strong double-digit volume growth of 14.8% and 10.7% YoY, respectively, while Bathware revenue achieved a healthy growth of 12.8% YoY. The Plastic Pipes industry reported 4.6% YoY volume growth, below expectation, affected by resin price volatility, subdued end-user demand and continued price competition driven by oversupply. Meanwhile, Tiles reported 1.1% YoY volume growth, with SOMC outperforming its peers in the tiles segment on a YoY basis
* Pipe Segment: HINDWARE and APOLP underperformed the industry average, reporting volume de-growth of 8.3% and 5.9% YoY, respectively. Average realisation declined 3.2%/6.1% QoQ/YoY to INR 132/kg. APOLP’s EBITDA/kg fell 35.1%/45.2% QoQ/YoY due to aggressive pricing and operational deleverage. In contrast, HINDWARE’s EBITDA/kg improved 15.1% QoQ and remained flat on YoY, supported by a more favourable product mix (CPVC mix ~40%). Capacity expansion plans remains on track: HINDWARE commenced commercial production of 12.5 KTPA at its Roorkee plant at the end of January 2026, while APOLP is expected to scale up its capacity to 286 KTPA by FY28E
* Bathware Segment: HINDWARE reported revenue growth of 14.3% YoY (down 2.8% QoQ) with lower EBITDA margin, dropped by 100 bps/20 bps QoQ/YoY. Meanwhile, SOMC delivered revenue growth of 4.5%/12.4% QoQ/YoY. Tiles demand edged up slightly, with SOMC reporting volume and revenue growth of 2.3% and 5.8% YoY, respectively
* Wood and Panel Segment: MTLM reported plywood growth of 12.6% YoY (down 5.5% QoQ) while realisation increased by 1.9% QoQ but down 3.4% YoY. EBITDA margin remained steady at 8.4%. The MDF category posted strong volume growth of 2.9%14.5% QoQ/YoY, supported by lower imports and its dominant position in Western India. Realisation remained stable at INR 31,416/CBM, driven by a richer product mix, though EBITDA margin declined 30 bps YoY (up 180 bps QoQ) to 10.1%. On capacity expansion: construction of MTLM’s Odisha plywood facility is progressing well, with commissioning targeted for Q4FY27E. The company has also expanded its MDF capacity from 800 to 1,000 CBM/day and announced a second MDF line of 700 CBM/day in Vadodara, targeted to commence commercial production by Q2FY28E
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