JPMorgan said pipe-sector stocks have corrected sharply since 12 November, with Astral down 9% and Supreme Industries down 11%, sharply underperforming the Nifty 500, which declined just 1% during the same period. The brokerage attributed the pullback to three negative developments around PVC prices, which have injected uncertainty into the near-term outlook.
JPMorgan noted that its earlier overweight view on both Astral and Supreme Industries was based on three pillars—sustained market-share gains, demand recovery in the second half of the financial year, and some pricing support from potential anti-dumping duties on PVC resin. While market-share gains continue to surprise on the upside, the brokerage said industry demand remains muted for now and PVC price volatility has increased, altering the sector’s near-term equation.
Against this backdrop, JPMorgan said it continues to prefer Astral over Supreme Industries, even though Astral has significantly outperformed SI year-to-date. The brokerage believes Astral’s margin self-help initiatives and renewed volume focus put it in a better position to navigate the current phase, whereas Supreme Industries’ improvement will likely require a more broad-based industry demand recovery and stabilisation of PVC pricing trends.
Disclaimer: The views above are those of JPMorgan. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
