Prakash Pipes Ltd Management Discussions

ECONOMIC OUTLOOK

Indian Economy

India entered FY27 after maintaining robust economic momentum, with real GDP expanding by 7.8% year-on-year in Q3 FY26 , compared with 8.4% in the preceding quarter . However, softer industrial activity, easing consumption indicators, rising food and energy prices, and weakening labour market conditions pointed to some loss of momentum toward the end of the year.

Real GDP growth is projected to moderate to 6.3% in FY27 , as rising inflation weighs on private consumption and elevated oil and gas prices, coupled with gas rationing, dampen investment activity. Employment growth and labour force participation are also expected to soften. Inflation is projected to rise to 4.8% driven by higher food, energy and fertiliser costs alongside currency depreciation, which is amplifying imported inflation across fuel and tradable goods. The current account deficit is likely to widen, as higher energy import costs outweigh the moderating effect of weaker domestic demand on imports. Persistent energy rationing poses a downside risk to growth, while more effective energy support measures could help preserve real incomes and consumption.

On the policy front, fiscal policy is set to turn expansionary in FY27 to cushion the impact of higher energy prices, with the budget targeting a modest reduction in the fiscal deficit to 4.3% of GDP from 4.4% . Monetary policy, after a period of easing, is expected to tighten, with a policy rate increase of around 25 basis points anticipated by the end of Q1 FY27 to keep inflation within the target band and anchor expectations. Regulatory streamlining and accelerated renewable energy adoption remain key structural priorities to boost productivity, investment and energy security.

Outlook

Real GDP growth is expected to recover to 6.4% in FY28 as some of the headwinds from higher energy prices, gas rationing, softer global demand and elevated production costs begin to recede. Inflation is projected to ease as commodity prices stabilise and the effects of earlier monetary tightening take hold, allowing monetary policy to ease as inflationary pressures subside.

On the fiscal front, energy price mitigation measures are expected to widen the deficit by around 0.4% of GDP relative to the budgeted path, supporting household incomes and consumption but slowing debt reduction, with public debt projected at 54.7% of GDP in FY28 . As energy prices stabilise and temporary measures unwind, fiscal policy is expected to resume a path of moderate consolidation.

Risks remain tilted to the downside, with prolonged energy supply disruptions, including gas rationing, threatening to constrain production, raise inflation and hurt agricultural output through reduced fertiliser supply, while elevated trade policy uncertainty could further weigh on exports and investment. On the upside, more effective energy support could limit the erosion of real disposable incomes and make consumption more resilient, particularly among liquidity-constrained households.

Going forward, shifting from broad, price-distorting energy interventions to targeted support for vulnerable households and viable firms could achieve similar outcomes at lower fiscal cost. Complementary priorities include expanding renewable energy and grid infrastructure and storage capacity to strengthen sustainability and energy security, alongside harmonising regulatory frameworks, expanding single-window clearance systems and digitalising approvals to reduce compliance costs and unlock investment.

INDUSTRY OVERVIEW

PVC Pipes and Fittings Industry

Industry estimates released during FY26 projected revenue growth of 10 - 11% for Indias polyvinyl chloride (PVC) pipes and fittings manufacturing sector, following flattish growth in the previous fiscal. The anticipated recovery was supported by robust demand from end-user segments and a more stable price environment. The uptick in demand was driven by positive momentum in government schemes such as Jal Jeevan Mission and Pradhan Mantri Awas Yojana , which focus on water supply, sanitation, and housing segments, with irrigation and water supply projects together accounting for close to three-fourths of sectoral revenues .

Higher volumes were expected to lift operating margins to 13.5 - 14% , partly reversing the 130-basis-point decline recorded in the previous fiscal. Dealer restocking was also expected to reduce manufacturers high-cost inventory. Replacement and new demand from the real estate sector were expected to contribute moderately, as fresh project launches were projected to decline compared with the preceding fiscals.

KEY GROWTH DRIVERS

Government Schemes

The Jal Jeevan Mission (Urban) was envisaged to provide universal water supply across 4,378 urban local bodies through 2.86 crore household tap connections , alongside liquid waste management in 500 AMRUT cities .

Pradhan Mantri Awas Yojana-Urban 2.0 also presents a significant demand opportunity for the PVC pipes and fittings industry. Launched with effect from September 1, 2024 , the scheme aims to address the housing needs of one crore urban poor and middle-class families over five years . The resulting expansion in urban housing is expected to support demand for PVC plumbing, drainage and sanitation systems.

Shift to CPVC and PVC Pipes

The ongoing shift from conventional galvanised iron pipes to modern CPVC and PVC alternatives continues to support demand, driven by the latters lower costs, easier installation, and longer operational lifespan, providing a stable demand floor even during periods of moderated real estate activity.

Rising Middle Class and Urbanisation

Rapid urbanisation and the expansion of Indias middle class continue to increase the need for modern plumbing and piping solutions, as the increasing number of urban households sought higher-quality water supply and sanitation infrastructure.

Irrigation Demand

Irrigation accounted for approximately 40% of overall pipe demand , yet with only half of Indias farmland currently under irrigation, significant headroom for growth remains. The governments 25% increase in the FY26 allocation for the Pradhan Mantri Krishi Sinchayee Yojana to Rs. 83 billion further reinforced its commitment to expanding irrigation coverage and water-use efficiency across the country.

Real Estate Sector Expansion

Indias real estate sector is projected to expand from approximately USD 290 billion in 2025 to USD 970 billion by 2030 , representing a significant long-term demand opportunity for PVC pipes and fittings across plumbing, drainage and construction applications. Growth across retail, hospitality, and commercial real estate further broadens the sectors addressable market and supports sustained demand for piping solutions.

Water Infrastructure Investment

Government-led investment in Indias water infrastructure sector is estimated to offer an annual opportunity of approximately Rs. 1 lakh crore . The need for such investment is reinforced by widespread water stress, which affects nearly two-thirds of the countrys population . The countrys water and wastewater market is projected to expand at a CAGR of 11.6% , reaching USD 17.9 billion by FY29 , representing a significant structural demand driver for PVC pipes and fittings.

Sustainability & Lead-Free Formulations

The transition toward environmental compliance gained momentum in FY26, with organised manufacturers increasingly adopting calcium-zinc and organic-tin stabilisation systems to meet BIS mandates and evolving municipal tender requirements for lead-free PVC pipes.

Environmental Performance of PVC Piping

PVC piping offers several environmental advantages that support its use in long-life underground infrastructure. Its manufacture requires less energy and fewer resources than several conventional piping materials, while the production process is highly efficient, with virtually the entire PVC compound being utilised and minimal process waste being generated.

PVC is produced using chlorine derived from salt, an abundant natural resource, together with natural gas. Its long operational life also supports efficient resource management by reducing the frequency of replacement and the associated consumption of materials.

The manufacture of PVC pipes requires approximately four times less energy than concrete pipes and around half the energy used for iron pipes . PVC pipe manufacturing facilities also operate without conventional smokestacks and can increasingly draw upon renewable energy sources such as wind and solar, further reducing the production footprint.

At the end of their useful life, PVC pipes can be recycled and reprocessed for further applications. Their environmental performance has also been evaluated through multiple life-cycle assessments covering impacts from raw material extraction and manufacturing through use and end-of-life.

Outlook

According to CRISIL Ratings , organised PVC pipe and fittings manufacturers are expected to record revenue growth of 10 - 15% in FY27 , largely driven by higher realisations amid elevated resin prices. EBITDA per tonne is projected to rise to approximately 23,000 from 21,200 in FY26 . With approximately two-thirds of resin requirements being imported, higher crude oil prices and a depreciating rupee are expected to keep input costs elevated, pushing realisations 12 - 15% higher year-on-year . Additionally, resin prices are expected to moderate in the third quarter of FY27.

Overall PVC pipe sales volumes are projected to decline by 3 - 5% in FY27 , as elevated costs and inflationary pressures constrain demand from plumbing and water-supply applications linked to urban infrastructure and real estate. The irrigation segment , which accounts for approximately 45% of total PVC pipe demand , is projected to grow by 2 - 4% , supported by increased irrigation requirements for the 2026 agricultural season and the launch of Jal Jeevan Mission 2.0 with a budgetary allocation of Rs. 67,670 crore .

Organised manufacturers are expected to add 5 - 10% to existing capacity , involving capital expenditure of approximately Rs. 2,500 - 2,700 crore and increasing gross block by 13 - 15% . Higher resin prices are also expected to increase working capital requirements, with inventory holding at manufacturers projected to rise by approximately 10 days to around 85 days . Nevertheless, healthy cash accruals and strong balance sheets are expected to support stable credit profiles.

While near-term volume growth is expected to remain under pressure, the industrys longer-term demand fundamentals remain supported by irrigation, water supply, sanitation, housing and urban infrastructure requirements. Key monitorables include volatility in global resin prices, developments relating to the West Asia conflict and the pace of demand recovery across end-user segments.

FLEXIBLE PACKAGING INDUSTRY

Indias flexible packaging market is projected to expand by USD 20.30 billion between 2025 and 2030, at a CAGR of 13.1% . Growth is expected to be supported by sustained demand from food and beverage, FMCG, pharmaceutical and personal care applications, alongside the rapid expansion of e-commerce, quick-commerce and organised retail. At the same time, the shift towards recyclable materials, lightweight formats and mono-material structures is reshaping packaging design and supporting compliance with evolving plastic waste management and Extended Producer Responsibility requirements.

Flexible packaging remains one of the most widely used packaging formats in India, owing to its cost efficiency, versatility and suitability for FMCG distribution. Beyond its established use across rolls, bags and pouches for consumer products, its application is expanding into industrial packaging, where transport resilience, space efficiency and logistics costs increasingly influence material selection.

Key Market Trends

Shift Toward Sustainable and High-Performance Materials - The Indian flexible packaging market is undergoing a critical transition toward mono-material structures and recyclable formats, driven by evolving plastic waste management regulations and Extended Producer Responsibility requirements. This is further supported by the increasing adoption of water-based inks, barrier coatings, and other functional coatings, reinforcing the industrys broader push toward sustainable, high-performance packaging solutions that meet evolving consumer and regulatory expectations.

E-Commerce & Organised Retail Fueling Demand - Rapid growth in e-commerce, quick-commerce and organised retail is accelerating demand for lightweight, durable, and shelf-stable packaging solutions that can withstand modern distribution and logistics requirements.

Advanced Barrier Technologies in Food, Beverage, and Pharmaceuticals - Food, beverage and pharmaceutical manufacturers continue to adopt high-barrier films and pouches to extend product shelf life and maintain safety. Within pharmaceutical packaging, anti-counterfeiting features are also gaining importance in protecting sensitive products and strengthening supply chain integrity.

Digital Integration and Smart Packaging - The adoption of high-speed automation and digital tools such as QR codes for traceability is strengthening product traceability, regulatory compliance and consumer engagement. These capabilities are extending the role of packaging beyond product protection to include authentication, information sharing, and brand interaction.

On the manufacturing front, high-speed automation, digital printing, automated die-cutting systems and advanced rotogravure presses are helping reduce changeover times and improve production throughput.

Key Growth Drivers

E-Commerce and Quick-Commerce Expansion - The rapid expansion of e-commerce and quick-commerce is a key demand driver for flexible packaging, increasing the need for durable, lightweight and logistics-efficient solutions. This is supporting the adoption of mono-material structures, including all-polyethylene (PE) formats that combine distribution performance with improved recyclability.

FMCG & Food Sector Dominance - Flexible packaging continues to account for a dominant share of Indias packaging market, supported by its cost efficiency, versatility and suitability for FMCG distribution. Sustained demand from the food and beverage sector, a principal end-user segment for flexible packaging in India, continues to underpin market growth.

Regulatory Push and Sustainable Innovation - Evolving plastic waste management regulations and Extended Producer Responsibility requirements are accelerating the transition towards recyclable materials, mono-material structures and more sustainable packaging formats. Manufacturers are consequently investing in material innovation and process capabilities to meet regulatory requirements while maintaining product performance.

Consumer preference for convenient packaging, alongside increasing environmental awareness, is further supporting demand for recyclable and resource-efficient solutions. Industry-led collaboration is also advancing this transition.

Investor Confidence & Private Equity Interest - Strong participation from private equity and strategic investors in Indias broader packaging industry underscores the sectors attractiveness and long-term growth potential, positioning flexible packaging for continued investment, capacity expansion and innovation across Indias evolving packaging landscape.

GOVERNMENT INITIATIVES

Strategic Policy Recognition

Indias packaging sector has gained significant policy momentum, with flexible packaging now recognised as a strategic growth sector aligned with the Governments Make in India vision. At the 2025 Speciality Films & Flexible Packaging Global Summit , which was supported by the Department of Chemicals & Petrochemicals , industry discussions identified technology upgrades, advanced materials and scalable recycling solutions as key priorities.

Extended Producer Responsibility (EPR) and Plastic Waste Management

The Plastic Waste Management Rules and Extended Producer Responsibility framework are central to Indias regulatory approach to plastic packaging, placing greater responsibility on manufacturers and brand owners for the management of post-consumer packaging waste. The framework is accelerating the transition towards recyclable packaging structures, increased use of recycled content and investment in recycling technologies, supporting the broader shift towards circularity.

FSSAI Packaging Regulations

The Food Safety and Standards Authority of India (FSSAI) has notified the Food Safety and Standards (Packaging) Regulations, 2018 , prescribing general and material-specific requirements for packaging that comes into direct contact with food. Separately, FSSAI has introduced measures intended to reduce the food and beverage industrys plastic footprint. These include permitting other food-grade materials for drinking-water packaging, issuing guidelines on the use of bamboo as a food-contact material and allowing paper-sealed reusable glass bottles for drinking water within hotel premises, subject to specified conditions.

Food Processing and Investment Support

The Ministry of Food Processing Industries (MoFPI) supports the expansion and formalisation of Indias food-processing ecosystem through programmes such as the Pradhan Mantri Kisan SAMPADA Yojana , the PM Formalisation of Micro Food Processing Enterprises Scheme , and the Production Linked Incentive Scheme for the Food Processing Industry . These programmes facilitate investment in processing capacity, integrated cold chains, agro-processing clusters, common infrastructure, technology adoption, branding, and market development.

While these schemes do not directly target packaging manufacturers, the resulting expansion of processed-food capacity and formalisation of enterprises can broaden the addressable market for flexible packaging solutions.

Outlook

The outlook for Indias flexible packaging industry remains positive, supported by demand from food and beverage, pharmaceutical and personal-care applications, along with the continued expansion of e-commerce, quick-commerce and organised retail. The market is projected to expand at a CAGR of 13.1% between 2025 and 2030 , supported by the adoption of recyclable and high-performance materials, technological innovation and expansion across end-use segments.

Government regulations are expected to continue influencing packaging design, material selection, recycled-content adoption and end-of-life management across the value chain. Going forward, investment in collection, sorting and recycling infrastructure, mono-material design, advanced recycling technologies and sustainable resin development will be important in balancing market growth with environmental responsibility.

FINANCIAL PERFORMANCE

Revenue

Revenue from operations was Rs. 788.71 crore in FY26 as against Rs. 780.48 crore in FY25 .

Key Ratios

Key Ratios	FY22	FY23	FY24	FY25	FY26
EBITDA Margin (%)	13.05	14.77	18.39	16.68	9.62
Net Profit Margin (%)	7.59	10.05	13.39	10.65	5.48
EBITDA/Net Interest Ratio	33.25	33.69	32.83	18.63	25.80
Debt-Equity Ratio (X)	Nil	Nil	0.02	0.02	0.01
Return On Equity (%)	19.81	25.59	24.55	18.73	9.04
Book Value Per Share ( \u20b9 )	98.38	116.48	152.67	185.51	200.17
Earnings Per Share ( \u20b9 )	19.57	29.81	37.48	37.74	18.09
Debtors Turnover (Days)	28	32	37	34	39
Inventory Turnover (Days)	44	38	41	41	46
Current Ratio (X)	3.06	4.15	3.51	3.57	2.11

(The source table is titled Key Ratios and is reproduced as printed.)

Expenses

Total expenses of the Company increased by 8.67% from Rs. 680.82 crore in FY25 to Rs. 739.86 crore in FY26 . Raw material costs, accounting for a 80.39% share of the Companys total expenses, increased 9.47% from Rs. 543.32 crore in FY25 to Rs. 594.77 crore in FY26 . Employee expenses, accounting for a 6.21% share of the Companys total expenses, increased 14.70% from Rs. 40.07 crore in FY25 to Rs. 45.96 crore in FY26 .

RISKS AND CONCERNS

Risk, representing the uncertainty that can influence business performance, is an integral and unavoidable aspect of the Companys operations. To effectively manage this, the Company follows a robust and holistic risk management framework designed to identify, classify, and prioritise operational, financial, and strategic risks. This approach reflects PPLs strong commitment to allocating significant time, resources, and expertise towards managing and mitigating these risks, thereby protecting our business interests and strengthening our ability to achieve sustainable growth.

INTERNAL CONTROL SYSTEMS

The Companys internal audit system has been continuously monitored and updated to ensure that assets are safeguarded, established regulations are complied with, and pending issues are addressed promptly. The Audit Committee reviews reports presented by the Internal Auditors on a routine basis. The Committee makes note of the audit observations and takes corrective actions, if necessary. It maintains a constant dialogue with statutory and internal auditors to ensure that internal control systems are operating effectively.

OPPORTUNITIES AND THREATS

Opportunities	Threats
Growing water and irrigation infrastructure: Sustained government investment in water supply, sanitation, and irrigation creates long-term demand opportunities for PVC pipes and fittings.	Raw material and currency volatility: High dependence on imported PVC resin exposes the industry to crude oil price movements, currency depreciation, and higher working-capital requirements.
Urban housing and real estate expansion: PMAY-U 2.0, increasing urbanisation and the projected expansion of Indias real estate sector can support demand across plumbing, drainage, and sanitation applications.	Near-term moderation in PVC pipe volumes: Elevated costs and inflationary pressures could constrain demand from urban infrastructure, real estate, plumbing, and water-supply applications.
Strong flexible packaging growth: Continued expansion of the Indian flexible packaging market provides opportunities across food and beverage, pharmaceutical, personal care, and other end-use segments.	Macroeconomic and geopolitical uncertainty: Energy-price shocks, disruptions in West Asia, inflation and trade-policy uncertainty could affect input costs, investment, and end-user demand.
E-commerce, quick-commerce and FMCG demand: Changing distribution and consumption patterns are increasing the need for lightweight, durable, and logistics-efficient flexible packaging solutions.	Increasing regulatory and compliance requirements: EPR obligations, recycled-content requirements and evolving plastic-waste regulations can increase compliance and operating costs for packaging manufacturers.
Sustainable and technology-led packaging solutions: The transition towards recyclable structures, advanced materials, high-barrier formats, automation and traceability creates opportunities for value-added product development.	Recycling complexity and sustainable material costs: The difficulty of recycling multilayer structures, coupled with the cost and availability of high-quality recycled materials, may challenge the economics of sustainable packaging solutions.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

The Company recognises its employees as a key driver of its success and remains committed to their continuous learning and development. During the year, various training programmes were conducted covering technical, behavioural, management, leadership, customer orientation, safety and organisational values. As on 31st March, 2026 , the Companys employee strength stood at over 550 .

CAUTIONARY STATEMENT

This Report contains forward-looking statements that may be identified by their use of words such as plans, expects, will, anticipates, intends, projects, estimates, or other words of similar meaning. All statements that address expectations or projections about the future, including statements about the Companys strategy for growth, market position, expenditures, and financial results, are forward-looking statements. Forward-looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realised.