Detailed Narrative
Challenging Market Conditions and Strategic Adjustments
The first nine months of FY26 proved to be the most challenging period for the Indian PVC pipe industry, characterized by weak end-user demand, heightened raw material price volatility, market oversupply, and intense price wars. This environment led to flat sales volumes for Apollo Pipes, contrary to expectations of double-digit growth. In response, the company adopted a more aggressive strategy for market share expansion, which has begun to show positive results from December onwards, with a 25% Y-o-Y sales volume growth observed in the last six weeks.
Segmental Performance and Product Diversification
Despite the overall market challenges🌐, Apollo Pipes' housing segment, accounting for 60% of its total business, demonstrated robust performance, growing over 10% Y-o-Y in the first nine months of FY26. The fittings business and CPVC volumes also grew by 10% Y-o-Y, while the water tank business achieved high double-digit growth. The company is actively diversifying its product portfolio by adding new offerings such as PLB ducts, DWC pipes, PE gas pipes, PVC-O pipes, and UPVC doors and windows, aiming to strengthen its presence in the building materials space.
Capacity Expansion and Geographical Growth
Apollo Pipes incurred a CAPEX of Rs. 125 crores in the first nine months of FY26, with a total FY26 CAPEX projected to reach Rs. 150 crores. The company plans to expand its total installed capacity to 2,86,000 tons over the next two years without incurring any additional debt. The West India facility is now fully integrated and operational, and the new Varanasi plant is expected to commence operations next month (March 2026), which will significantly enhance the company's market reach in Eastern India.
PVC Resin Price Volatility and Inventory Management
The PVC resin market experienced extreme volatility, with prices falling by approximately Rs. 11/kg from October to December 2025 (from Rs. 72 to Rs. 61) before recovering by Rs. 7-8/kg in January. This unpredictability led to cautious behavior and continuous restocking by channel partners, contributing to high inventory levels (80 days) as of December 2025. However, management anticipates that strong sales momentum in Q4 will help reduce inventory days to 60 by Jan-Feb 2026.
Kisan Mouldings Integration and Future Outlook
The integration of Kisan Mouldings, acquired in FY25, has been completed, with all key functions now streamlined. Although the business faced initial struggles, its foundation is now set, and management expects traction from Q4 onwards. Kisan Mouldings currently operates at 40% utilization (21,000-22,000 tons/year), with a target to reach 70% utilization (35,000-38,000 tons/year) in the next two years. A CAPEX of Rs. 30-40 crores is planned for modernization to boost capacity by 15-20%, with an expected EBITDA of Rs. 4,000-5,000 per ton in FY27/FY28.
Funding and Shareholding Structure
Apollo Pipes secured Rs. 110 crores through warrants in April 2025, with 25% already received and the remaining 75% expected by October 2026. These warrants are held by Kitara Capital, a Middle Eastern fund, and are intended to support the company's capacity expansion plans without increasing its debt burden. Management clarified that there are no outstanding warrants from the promoter entity, as all promoter warrants were fully exercised in 2025.