Goldman Sachs has revised its outlook on India’s pipe industry, lowering the target price for Astral to ₹2,170 from ₹2,410, while maintaining a ‘Buy’ rating. Meanwhile, the brokerage downgraded Prince Pipes to ‘Neutral’ from ‘Buy,’ cutting its target price to ₹480 from ₹705.
The brokerage highlighted subdued PVC prices in China, which point to a more gradual recovery for the sector. While Astral, the industry leader, is showcasing resilience with pricing power and margin discipline, Prince is grappling with challenges in balancing growth and margins, with pressures expected to persist for a few quarters.
Goldman Sachs also noted that channel checks reveal inventory levels in November remain high despite an anticipated pick-up in demand from the real estate sector. Margins and volume growth are believed to be bottoming out, but the recovery is likely to be protracted, signaling a cautious near-term outlook for the pipe manufacturers.
