Plastic Pipe Makers Show Strong Q4 Performance as PVC Resin Prices Surge; Gold ETFs See Net Outflows

Plastic Pipe Makers Show Strong Q4 Performance as PVC Resin Prices Surge; Gold ETFs See Net Outflows​

The performance of plastic pipe manufacturers showed significant strength in the fourth quarter (January-March) of FY26, with volumes and revenues hitting multi-quarter highs. However, while margins expanded during the peak demand period, near-term headwinds related to fluctuating PVC prices and rural demand are expected going forward.

A sharp surge in PVC resin prices contributed significantly to the strong results for the sector. During March 2026, PVC resin prices surged to $1,150 per tonne, marking an 85 percent sequential increase due to global supply disruptions and geopolitical tensions in West Asia, which led to aggressive advance buying by dealers and inventory stocking.

Q4 Gains vs. Q1 Challenges​

The recovery in the plastic pipe sector was primarily driven by robust demand and dealer restocking spurred by the rise in PVC resin prices. PVC resin prices surged 64 percent year-on-year (YOY) during the quarter, attributed to global supply disruptions, geopolitical tensions in West Asia, elevated crude oil prices, and tighter petrochemical supply conditions.

Operating profit and margins remained strong for major players due to a better product mix, inventory gains, higher realizations, and healthy volume growth, resulting in operating leverage. Margins for key industry participants expanded by 2-10 percentage points on a year-on-year basis.

Analysts noted that the Q4 performance was bolstered by organized players gaining market share. According to ICICI Securities analysts Arun Baid and Nikunj Shah, the sector saw healthy profitability in Q4 due to peak demand season and channel restocking as PVC prices rose. Except for Finolex Industries, pipe volumes grew between 18.3 percent and 24.2 percent compared to the previous year's quarter.

Despite the strong Q4 results, some gains have been offset in the first quarter (April-June) of FY27 due to PVC price volatility and weaker demand conditions. Agricultural pipe demand remained weak during April and May as farmers deferred purchases in anticipation of lower prices. Demand from government water projects like the Jal Jeevan Mission, irrigation, and sewerage projects also remained sluggish.

Motilal Oswal Research indicated that while plumbing demand and infrastructure activity showed gradual improvement in January and February, the recovery accelerated only briefly before demand conditions worsened following Q4. Meanwhile, 360 One Capital Research reported that Q1 FY27 started on a softer note, citing channel destocking amidst PVC price volatility and weaker construction activity across key end markets.

Gold ETF Market Sees Outflows Amid Corrections​

In the commodities market, gold exchange-traded funds (ETFs) recorded net outflows of US$61 million (equivalent to 582 crore or 0.4 tonnes) in May, according to data from the World Gold Council. This marked the first monthly outflow in a year, reducing total holdings to 1163 tonnes.

HDFC Asset Management Company (AMC) has implemented restrictions on lump-sum purchases and switch-ins in its HDFC Gold ETF Fund of Fund, limiting them to X10 lakh per permanent account number (PAN) per calendar month.

Gold funds have posted a positive return of 57.1 percent over the past year but experienced a correction of 4 percent in the last three months.

Experts highlighted that while organized players such as Astral, Supreme Industries, Prince Pipes, and Finolex gained market share even as the PVC pipe industry contracted by 9 percent in FY26, profitability is expected to normalize as PVC prices move closer to historical ranges.

Factors noted to potentially weigh on gold rallies include weak jewellery demand in India, which has reduced affordability due to record-high prices, and concerns over interest rate hikes. Conversely, long-term support for gold remains intact, anchored in the expansion of sovereign balance sheets and rising global debt levels.

MRF Stock Price Movement​

Today, shares of MRF Limited slipped by 0.16% to settle at ₹122750 after trading post-market. The stock saw a modest volume of 4,774 shares today.