UBS has initiated coverage on the plastic pipe sector with contrasting views on two key players — Astral and Supreme Industries. The brokerage set a buy rating on Astral with a target price of ₹1,800, while it initiated a sell call on Supreme Industries with a target price of ₹3,500.
UBS said it expects plastic pipe sales volume recovery to pick up momentum in the second half of FY26, driven by increased government spending, faster real estate project completions and rising agricultural income. The brokerage projects the sector to deliver high single-digit sales volume growth in FY27.
On pricing trends, UBS noted that PVC prices are currently near the bottom and could rebound, supported by China’s anti-involution policies as well as Indian government measures such as BIS norms and anti-dumping duties. The brokerage said the market is underestimating the potential upside in PVC prices and the resulting margin gains for pipe manufacturers.
Astral was given a buy rating due to its margin upside potential from backward integration. UBS said this positions the company well to capitalise on the expected sector recovery.
In contrast, Supreme Industries was assigned a sell rating, with UBS flagging concerns over its high capital expenditure requirements, pressure on return on capital employed (ROCE) and challenges in its non-pipe businesses. The brokerage said these factors limit earnings visibility despite an improving sector outlook.
Disclaimer: The views and investment recommendations expressed above are those of UBS. They do not represent the views of this publication. This article is for informational purposes only and is not investment advice.
