The brokerage believes the sector is approaching a demand recovery inflection point, forecasting a turnaround in the second quarter and a margin recovery in the second half of the year.
It projects 17-18% EPS growth over the next three years, while flagging polyvinyl chloride (PVC) price volatility as a key risk.
Earlier, on Wednesday (September 10), UBS initiated coverage on these pipe stocks but with divergent views, issuing a ‘Buy’ rating on Astral with a price target of ₹1,800, and a ‘Sell’ rating on Supreme Industries with a target of ₹3,500.UBS mentioned Astral’s margin expansion potential driven by its backward integration strategy. In contrast, Supreme was downgraded due to high capital expenditure, declining RoCE, and challenges in non-core businesses.
UBS expects plastic pipe sales volumes to recover in the second half of FY26, supported by government infrastructure spending, real estate project completions, and rising agricultural incomes.
It projects high single-digit sector volume growth by FY27. UBS also said that PVC prices are near their cyclical bottom, with a likely rebound that could lead to better-than-expected margins for pipe manufacturers.
On Thursday, Astral shares closed 0.18% lower at ₹1,441, while Supreme Industries gained 1.55% to settle at ₹4,348.90.
