The brokerage said the Indian plastic pipes industry has evolved significantly, registering a 10% compounded annual growth rate (CAGR) over the last decade to reach a size of ₹54,100 crore in the financial year 2024.
Over financial year 2024-2027, the Pipe industry is likely to grow at a 14% CAGR to ₹80,500 crore, driven by strong demand from housing, irrigation, water supply and sanitation, according to Motilal Oswal, who added that robust replacement demand will be another key growth driver.
The three companies, on whom Motilal Oswal has initiated coverage on, are some of the key players operating in the Indian plastic pipes space and the brokerage believes they are well-positioned to gain further market share and deliver a healthy earnings trajectory.
Fluctuation in polymer prices, stagnation in real estate demand, threat from competition and dilution of brand name are the key risks for the stocks.
Supreme Industries
Motilal Oswal has a price target of ₹5,400 per share on the stock, implying a potential upside of 22.4% from its previous close of ₹4,412 apiece.
The brokerage said it estimates the Supreme Industries’ revenue, earnings before interest taxes depreciation and amortisation (EBITDA), and adjusted profit after tax (PAT) to report a CAGR of 14%, 20% and 23%, respectively, over financial year 2025-2028. Healthy volume growth of 13% CAGR and improving margin profile are the key drivers for the same, it added.
Of the 26 analysts that have coverage on the stock, 16 have a “buy” rating, six have a “hold” rating and four have a “sell” rating.
Astral Ltd.
Motilal Oswal has a price target of ₹1,800 per share on the stock, an upside of 19.6% from its previous close of ₹1,505.4 apiece.
The brokerage said the company has solidified its position as a pioneer in India’s plastic pipe industry, revolutionising the sector with CPVC pipes in 1998 and expanding into five key segments — pipes, water tanks, adhesives and sealants, bathware and paints.
With the highest total addressable market of ₹1.59 lakh crore in the industry, Astral’s strategic acquisitions, capacity expansions and strong exports drive sustained double-digit growth, it said.
Motilal Oswal said the company’s revenue, EBITDA, adjusted PAT is estimated to clock a CAGR of 16%, 17% and 23%, respectively, over FY25-28, driven by volume growth of 12% CAGR.
Of the 27 analysts that have coverage on the stock, 18 have a “buy” rating, six have a “hold” rating and three have a “sell” rating.
Prince Pipes
Motilal Oswal has a price target of ₹500 per share on the stock implying an upside potential of 46% from Wednesday’s closing levels.
The brokerage said Prince Pipes is among India’s top five plastic piping providers and operates seven plants with over 7,200 stock keeping units (SKUs) and over a 1,500 distributor network.
With 25% of revenue from CPVC and 70% from real estate, Prince Pipes is set to benefit from India’s growing real estate sector, the brokerage said. Strategic expansion in East India, premium product launches and government infrastructure projects further drive growth, it added.
Motilal Oswal said the company’s revenue, EBITDA, adjusted PAT is estimated to report a robust CAGR of 15%, 38% and 73%, respectively, over FY25-28, due to a low base, driven by 12% volume CAGR.
Prince Pipes is currently trading at 22x its FY27 earnings per share, which is an attractive valuation given the growth trajectory, the brokerage said.
Of the 14 analysts that have coverage on the stock, nine have a “buy” rating, three have a “hold” rating and two have a “sell” rating.
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