The plumbing segment reported a decline in revenue growth, whereas the adhesives and paints segments reported decent revenue growth. The management expects volumes to improve in the second half of 2024-25 as stabilisation in PVC prices will lead to channel restocking by the dealers. It has guided for 10-15% volume growth in the pipe business and 15% revenue growth in the India adhesive segment in 2024-25. Anticipated anti-dumping duties on PVC resin, likely BIS norms on PVC and higher freight costs are expected to support PVC prices. Apart from volume growth, the rising prices will also lead to inventory gains and support profitability.
The company exports to more than 31 countries the manufacturing units are spread across India, the US and UK. It is a beneficiary of the buoyant growth prospects of plastic pipes, water tanks, adhesives, paints and sanitaryware segments.
Factors like the government’s focus on improving water infrastructure, increasing urbanisation, rising demand for housing and irrigation demand for agriculture are the key growth drivers of the plastic pipes and water tanks segment. On the other hand, the expanding construction industry, rising automotive production and increasing demand from the packaging industry are driving the adhesives segment.
The paints segment is driven by rising incomes, preference for durable, aesthetic paints, and real estate growth. Sanitaryware demand stems from modern bathroom trends, hospitality growth, and replacement needs. The company enjoys multiple strongholds, which help in sustaining growth. Robust manufacturing capabilities, product innovation, extensive distribution network, strong brand equity, diversified product portfolio and foray into value-added segments are some of the factors that help it maintain its competitive strength.The ongoing capacity expansion is expected to contribute to top-line growth in the future. While the Hyderabad plant began operations in September, commercial production of O-PVC at the Dholka plant and PTMT plastic taps will begin by the end of the third quarter of the current financial year. It is also setting up capacities in Kanpur for water tanks to cater to the growing demand.Analysts list superior product mix, cost rationalisation, healthy balance sheet, expected improvement in the UK business and paint business, and aggressive capex plans as the key positives.
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