Polyvinyl chloride pipes and fittings manufacturers will register volume growth of 13-15% in FY2023-24 on the back of higher budgetary allocation for government schemes in water supply, irrigation, housing, and infrastructure, Crisil Ratings said on Monday.
This will follow a decadal-high growth of 22-24% in the current fiscal due to strong pent-up demand, after a subdued compound annual growth rate of 2% over the past three years, according to a Crisil Ratings analysis of 18 PVC pipes and fittings manufacturers, representing 45-50% of the sector.
The volume growth next fiscal will be sparked by two key demand drivers.
Firstly, higher capital allocation in the Union Budget for irrigation and housing schemes such as Jal Jeevan Mission and Pradhan Mantri Awas Yojana and continued healthy demand from the residential real estate sector, CRISIL Ratings Director Anand Kulkarni said.
For companies operating in the sector, more than 70% of the demand comes from agriculture, water supply, irrigation, and sewerage, and depends, directly or indirectly, on government funding.
The remaining demand is from residential plumbing and industrial applications.
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