PL Capital Sees Muted Q1FY26 for Building Materials; Century Plyboards, Greenpanel to Outperform
- 3rd July 2025
- 01:00:00 PM
- 4 min read
Mumbai | July 3 – India’s building materials sector looks set for a subdued Q1FY26, with the Street bracing for muted volumes and margin strain across PVC pipes, tiles, and bathware, even as wood panel players like Century Plyboards and Greenpanel Industries appear poised to hold fort.
In its latest note, PL Capital flagged concerns around PVC resin price volatility, soft channel demand, and oversupply in tiles that are likely to pinch sector margins. While housing demand remains structurally strong, the near-term outlook is one of caution, the brokerage highlighted.
“Green shoots are visible in the wood panel segment, but pipes and tiles will continue to grapple with raw material volatility and pricing pressure,” said Praveen Sahay, Senior Analyst, PL Capital.
Pipe, Tile Volumes Sluggish; Margins Under the Pump
The PVC pipes space is tracking a modest 5.2% YoY volume uptick, but revenue growth may stay subdued at 2.2% as price swings and cautious channel stocking weigh. Margins are likely to compress by 110 bps, dragging EBITDA and PAT down by 5–4% YoY. In tiles and bathware, Kajaria Ceramics is looking at 4.5% YoY sales growth with 6.7% volume gains, while Cera Sanitaryware could post 6.2% growth. However, oversupply in the domestic market, coupled with reduced Morbi exports, is likely to keep margins under pressure for the segment.
Wood Panel: Holding Up Amid the Noise
The wood panel segment is the bright spot, with Century Plyboards tracking a strong 10.6% YoY revenue rise, backed by 6% plywood and 20% MDF volume growth, and PAT expected to nearly double. Greenpanel Industries may clock 14.9% YoY sales growth driven by MDF and plywood demand, although slight margin contraction may keep bottom-line growth muted.
“The segment is well placed to ride the H2FY26 demand recovery as exports normalise and domestic demand picks up pace,” noted Rahul Shah, Analyst, PL Capital.
Q1FY26 Snapshot
| Company | Sales (₹ Cr) | YoY Growth (%) | EBITDA Margin (%) | PAT YoY Growth (%) |
| Astral Ltd. | 1,473 | 6.50% | 15.50% | 2.40% |
| Century Plyboards | 1,112 | 10.60% | 11.90% | 95.40% |
| Cera Sanitaryware | 426 | 6.20% | 15.30% | 8.90% |
| Finolex Industries | 1,045 | -8.30% | 14.60% | -11.90% |
| Greenpanel Industries | 419 | 14.90% | 9.00% | -1.00% |
| Kajaria Ceramics | 1,163 | 4.50% | 14.50% | 4.50% |
| Supreme Industries | 2,754 | 4.50% | 14.00% | -2.60% |
PL Capital View-
- Astral Ltd: Modest volume-led growth expected with steady margins amid PVC volatility; PL Capital has an Accumulate rating on the stock with a target price of ₹1,630.
- Century Plyboards: Strong double-digit growth driven by plywood and MDF volume gains with PAT nearly doubling; PL Capital has a Hold rating with a target price of ₹775.
- Cera Sanitaryware: Stable growth in faucets and sanitaryware with margin improvement; PL Capital rates the stock Accumulate with a target price of ₹7,389.
- Finolex Industries: Revenue likely to decline despite slight volume uptick due to lower realizations; PL Capital maintains a Hold rating with a target price of ₹222.
- Greenpanel Industries: Strong MDF and plywood demand to drive growth despite slight margin contraction; PL Capital has a Buy rating with a target price of ₹310.
- Kajaria Ceramics: Muted growth amid domestic oversupply in tiles with steady margins; PL Capital rates the stock Accumulate with a target price of ₹1,171.
- Supreme Industries: Modest gains across segments with mild margin pressure; PL Capital maintains a Hold rating with a target price of ₹4,346.
Outlook
The near-term outlook for building materials remains cautious, with margin pressures expected to persist in pipes and tiles. However, the Street will closely watch H2FY26 for a demand revival led by housing and infrastructure tailwinds. In its note, PL Capital highlighted that wood panel players are better positioned to ride this recovery, while pipes and tiles may require selective exposure until pricing stabilises.
“Investors should track raw material price trends, demand momentum in housing, and export stability, which will dictate how the sector shapes up over the next two quarters,” added Sahay.
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PL Capital
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
