Will India's PVC Pipe Manufacturers Achieve Over 10% Revenue Growth in FY26?

New Delhi, July 23 (NationPress) The manufacturing industry for polyvinyl chloride (PVC) pipes and fittings in India is projected to experience a revenue increase of 10-11 percent during the current fiscal year (FY26). This growth is primarily driven by strong demand from end-user sectors and an improved pricing landscape, according to a report released on Wednesday.

Manufacturers are expected to recover this year after experiencing stagnant revenue growth in the previous financial year, as indicated by Crisil Ratings in their recent analysis.

The surge in demand can be attributed to positive developments in government initiatives such as Jal Jeevan Mission, PM Awas Yojna, and other construction-related activities.

“The demand for PVC pipes and fittings has remained strong lately, supported by government programs like Jal Jeevan Mission and Pradhan Mantri Awas Yojna, which emphasize the water supply, sanitation, and housing sectors,” stated Himank Sharma, Director at Crisil Ratings.

This growth is anticipated to help manufacturers reduce their high-cost inventory as dealers start to replenish their stock, partially offsetting a 130 basis points drop in operating margins from last year.

Enhanced profitability and reduced inventory levels will also lessen manufacturers' working capital needs, allowing them to expand production capacity without straining financial resources, the report noted.

The analysis highlights that 16 PVC pipe manufacturers, with combined revenues exceeding Rs 30,000 crore—accounting for two-thirds of the organized sector's revenues last fiscal—showcase significant growth potential this year.

Typically, manufacturers distribute products to dealers, who then supply end-user industries like irrigation, water supply, sanitation, plumbing, as well as urban infrastructure and real estate, catering to both new projects and replacements.

The report also emphasized that demand from irrigation and water supply initiatives, which contribute nearly three-fourths of the sector's income, is expected to remain strong due to government incentives in these areas.

New demand and replacement needs from the real estate sector will also play a role, albeit modestly compared to previous years, as the launch of new projects is anticipated to decline.

This fiscal year, volume growth is expected to accelerate, supported by stable prices and demand, with provisional ADD keeping resin prices steady, the report indicated.

Increased volume is likely to facilitate a 10-11 percent revenue growth for manufacturers and enhance operating rates, resulting in a recovery of operating margins to 13.5-14 percent this fiscal year.

“Furthermore, improved demand will prompt dealers to restock, reducing manufacturers' inventory by 8-10 days, thereby minimizing debt accumulation,” explained Rushabh Borkar, Associate Director at Crisil Ratings.