The rebound is being driven by strong demand from key end-user industries and a more stable pricing environment.
This growth comes after flattish revenues and a 130 basis points’ decline in operating margins last fiscal, largely due to volatile resin prices and destocking by dealers. However, manufacturers are now likely to benefit from improved demand visibility, stable raw material costs, and favourable policy support.
“Demand for PVC pipes and fittings has remained robust in recent times, driven by government schemes such as the Jal Jeevan Mission and Pradhan Mantri Awas Yojana, which focus on the water supply, sanitation, and housing segments. What has changed is the government more than doubling the budgetary allocation this fiscal, year-on-year, for these schemes, which can drive up the requirement of PVC pipes and fittings even more,” said Himank Sharma, Director, Crisil Ratings.
Crisil’s analysis is based on 16 leading PVC pipe manufacturers accounting for about ₹30,000 crore in revenues — roughly two-thirds of the organised sector’s turnover last fiscal. These manufacturers primarily cater to sectors such as irrigation, water supply, sanitation, plumbing, and real estate, with around 75% of revenues coming from irrigation and water supply projects.
While the demand outlook remains strong, raw material prices — particularly PVC resin, 55–60% of which is imported — continue to be volatile. The global price of PVC resin fell by 10% last year due to lower crude prices, prompting the Indian government to impose a provisional anti-dumping duty (ADD) to protect domestic producers. The ADD has since helped stabilise resin prices, enabling better planning and inventory management for manufacturers.
“Better demand will lead to restocking by dealers and reduce inventory at manufacturers by 8–10 days, curbing the need for additional debt,” said Rushabh Borkar, Associate Director, Crisil Ratings. “Despite a planned capex of approximately ₹2,100 crore this fiscal, strong cash flows and liquidity will help manufacturers maintain a debt-to-EBITDA ratio below 0.35 times and an interest coverage ratio above 22 times.”
Operating margins are projected to improve to 13.5–14% this fiscal, as higher capacity utilisation offsets the cost pressures seen last year.
