JM Monetary initiates protection on 3 plastic pipes inventory, predicts as much as 27% upside

Home brokerage agency JM Monetary has initiated protection on 4 gamers in India’s plastic piping trade, projecting an upside potential of as much as 25%. The brokerage believes that the sector, which weathered a number of macro headwinds in FY25—together with subdued infrastructure spending, liquidity stress, and volatility in PVC costs—is now poised for a multi-year restoration.

JM Monetary said that near-term progress is more likely to be aided by channel restocking and stabilising PVC costs (Rs 79/kg as of September 2025), whereas medium-to-long-term tailwinds embody a strengthening actual property cycle, rising authorities infrastructure push, and rising substitute demand.

The trade continues to shift from a fragmented, agri-led market to a extra organised ecosystem catering to purposes throughout water provide, sanitation, plumbing, and industrial use. Regulatory help—equivalent to potential anti-dumping duties and stricter BIS norms anticipated by end-2025—might additional increase margins and drive consolidation.

JM Monetary expects India’s plastic piping market to develop at a ten–12% CAGR over FY25–30E, presenting selective funding alternatives inside this structural upcycle. The agency has accordingly initiated or re-initiated protection on 4 shares: Supreme Industries, Astral, Prince Pipes & Fittings, and Plastic Pipes (Adhesives Adjacency Play).

Supreme Industries: Purchase | Goal Worth: Rs 5,400 | Upside Potential: 26.5%

JM Monetary has initiated protection on Supreme Industries (SI) with a BUY ranking and a goal worth of Rs 5,400. As India’s largest and most diversified plastics participant, SI operates over 30 vegetation with 946,000 tonnes of piping capability—practically double that of its nearest peer. The corporate is concentrating on 1 million tonnes of capability by FY26, supported by latest acquisitions that improve its know-how and market attain.

Robust money flows (~Rs 50 billion over FY25–28E), a web money stability sheet, and constant sector-leading capex (~Rs 29 billion) underpin its progress profile. Return ratios of over 20% (final 5 years) and dividend payouts of ~35% add to its funding attraction. JM Monetary forecasts an EPS CAGR of ~20% over FY25–28E and values the inventory at 45x Sep’27 EPS, implying a ~25% upside from present ranges. Key dangers embody succession planning uncertainties.

Astral: Add | Goal Worth: Rs 1,600 | Upside Potential: 13.8%

Astral Ltd, a CPVC market chief with a powerful presence in adhesives, has obtained an ADD ranking with a goal worth of Rs 1,600. The corporate derives 70–75% of its income from pipes and is strengthening backward integration with its upcoming 40ktpa resin plant (Q2FY27), which is anticipated to reinforce margins and safe provide.Astral continues to learn from excessive progress in bathware and adhesives (which account for 22–23% of income), though elevated competitors and corrective pricing could weigh on short-term efficiency. JM Monetary expects an EPS CAGR of 18% over FY25–28E and estimates free money move of ~Rs 19 billion throughout this era. With restricted capex necessities and bettering returns, Astral is positioned to generate web money of Rs 10 billion by FY28E. Nonetheless, given its wealthy valuation of 55x Sep’27 EPS, the upside is capped at round 10%.

Prince Pipes and Fittings: Add | Goal Worth: Rs 360 | Upside Potential: 9%

JM Monetary has re-initiated protection on Prince Pipes and Fittings with an ADD ranking and a goal worth of Rs 360. The corporate is repositioning itself as an built-in water options supplier by scaling up its bathware and water tank companies. Regardless of a difficult FY20–25 interval with decrease quantity progress (~6% CAGR) and a pointy decline in margins (EBITDA margin from ~14% to ~6%), JM Monetary sees indicators of restoration.

The brokerage forecasts quantity progress of ~9% CAGR and margin enchancment to ~11% by FY28, supported by a low base, a greater product combine, and scale advantages. Return ratios, which had fallen from over 20% to ~3%, are anticipated to enhance to 9–10% by FY28. The goal worth is predicated on 27x Sep’27 EPS, aligning with the inventory’s 5-year common valuation. Dangers embody heightened competitors and continued PVC worth volatility.

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(Disclaimer: Suggestions, options, views and opinions given by the specialists are their very own. These don’t symbolize the views of The Financial Instances)