Like any other building materials industry, plumbing pipe industry too has suffered badly due to countrywide lockdown. April month has seen almost nil sales for the plumbing pipes as the house construction activity was completely stopped due to lockdown.
However, companies manufacturing both plumbing pipes and irrigation pipes are slightly better off than the companies manufacturing only plumbing pipes as in case of former demand pick up has started in May due to demand from agricultural sector.
According to plumbing pipe manufacturers, demand for the month of June (which is likely to be the first full month of operation after the lockdowns) would however, set the tone for the rest of the year. In the first half of the current fiscal, manufacturers mainly plan to focus on the rural market which they feel will be the hub of economic activity. For them, survival during the year remains the key and the endeavour would be to achieve cash breakeven during this testing period.
However, most of the plumbing pipe manufacturers hope that second half of the current fiscal would be better than the first half. In the second half expected revival in affordable housing projects may push up the demand along with sustained (need-based) replacement demand. Further, pick up in the infrastructure activities may help to revive the demand for underground drainage segment and niche product segments like DWC pipes, PEX pipes, residential/industrial valves, etc. Also, channel demand too is expected to grow as they are already carrying lean inventory.
While majority of plastic piping factories have resumed operations in later part of April, intermittent disruptions in the near term cannot be ruled out if that factory comes into containment (hotspot) zone.
Most of the manufacturers would try to conserve cash and cut costs. In some cases, salary cut is also not ruled out. Efficient management of receivables is another factor which the manufacturers likely to focus on to remain relevant.