India's leading polyvinyl chloride (PVC) pipe makers like Astral, Supreme Industries, Prince, Apollo and Jain Irrigation are set to report 10-12% volume growth in the financial year 2024-25, thanks to strong demand from end-user industries like irrigation, water supply, sanitation and housing.
The PVC pipes industry is set to score a double-digit volume growth of 10-12% on-year in fiscal 2025 after 15% and 24% in fiscals 2024 and 2023, respectively, says a Crisil Ratings analysis of 22 PVC pipe makers accounting for 40-45% of the segment’s volumes. Irrigation, water supply, sanitation and housing accounting for over 80% of total demand has been the key growth driver, triggering a larger capital expenditure by PVC pipe makers this fiscal and the next.
“PVC pipe makers are expected to incur a capex of ₹5,000 crores over next two years to expand their capacity by 20-25% and further new capacities will commission in a staggered manner and hence are likely to be absorbed by healthy demand,” says Jaya Mirpuri, Director, Crisil Ratings.
The sector has benefitted from continued budgetary allocations towards schemes such as Jal Jeevan Mission (direct water connections to all households) and Pradhan Mantri Krishi Sinchai Yojana. Now only 76% of households have direct water connections and increasing irrigation coverage is expected to continue over the medium term with irrigation access being at 54% of the net sown area in fiscal 2024. Residential real estate is also an important demand driver for PVC pipes because of plumbing applications. Mid to premium residences have high demand and budgetary allocations towards Pradhan Mantri Awas Yojana, which focuses on affordable housing, will also drive demand, estimates Crisil.
Astral Ltd, one among the leaders of PVC pipes, is setting up a 15,000 million tonnes per annum (MTPA) caapcity in Guwahati and first phase of another 10,800 MTPA plant coming up in Hyderabad, slated for commissioning in second half of FY25. Supreme Industries's plastic piping business grew from ₹6,037 crore in FY23 to ₹6,931 crore in FY24.
