BIS Implementation Delay For PVC Hurts Pipe Makers; Astral, Supreme Industries Stocks Down
The implementation of the said certification was expected to come in for PVC, which would benefit listed pipe makers. This, however, has now been pushed to December.
The government has delayed the implementation of quality control standards for PVC or Poly Vinyl Chloride, which is a key material used to increase durability of pipes. This is a negative for organised listed pipe players like Astral, and Supreme Industries among others.
Bureau of Indian Standards or BIS ensures products meet prescribed Indian Standards and are certified accordingly. The implementation of the said certification was expected to come in for PVC, which would benefit listed pipe makers. This, however, has now been pushed to December.
Companies Bank On BIS Implementation
In its fourth quarter conference call, Astral's management had mentioned that BIS is good for the industry as it would bring about a lot of standardised norms.
BIS has been implemented across industries for both final product and sourcing of raw materials. Sectors like steel, footwear, consumer goods etc. have already seen implementation. Recently, sectors like plywood and timber has seen implementation of BIS and listed players like Century and Greenply have been long vocal about its benefits.
But with the implementation for PVCs now pushed to December, there could be elimination of carbide-based PVC.
Absence Of Anti-Dumping Duty
The other big problem is the dumping of the PVC in the country, according to Astral Chief Financial Officer Hiranand Savlani. Currently, there has been lot of dumping of PVC from countries like China. Management highlighted that currently carbide-based PVC is being imported, which is not a good polymer or of low quality. Because it is cheap, most of the manufacturers are moving in that direction because of the competition.
Supreme Industries' Managing Director MP Taparia said that while they don't have a view on timeline of implementation of anti-dumping duty, PVC prices have dropped too much. It has become very uneconomical and prices will come close to bottom or might have gone to bottom, according to him.
Going Forward: Multiple Key Monitorables
While the timeline of BIS is now set at December 2025, all organised players will look for a timeline of anti-dumping duty of PVC. This has become a larger problem for pipe players.
In FY25, PVC prices were volatile within the quarter as well. Essentially for a commodity player, in this case pipes, if prices go upwards or downwards, its key for the players that they stay in a direction. This helps the piping companies either to pass it down to end consumers and manage inventory. The major issue happens when prices move up and down in the same quarter or three month period which leads to inventory losses for players, something that happened in FY25 for pipe players. An example would be if the price of PVC is Rs 100 per kg at the start of the quarter, touches a high of Rs 130 per kg during the quarter and ends at Rs 70 per kg. This leads to inventory losses for pipe players, since they might have bought at the high of Rs 130 per kg.
