High margins of plastic pipe makers unlikely to sustain going forward

Volume recovery and cost rationalisation may offset some of the pressure on margins

Stocks of plastic pipe companies Supreme Industries, Astral Poly Technik, Finolex Industries, and Prince Pipes have gained 24-74 per cent in the last three months. The recent gains come on the back of successive price hikes of polyvinyl chloride or PVC pipes announced by the players. 

After an increase of 19 per cent in the June quarter, PVC prices are up 18 per cent in the December quarter. PVC prices have gained about 64 per cent since the start of May and are pegged at a record Rs 107 per kilogram currently. The rise in prices is due to global supply