Building Materials Q3 Results Review - Weak In All Segments To Stay In The Near-Term: Systematix

Systematix Research Report

Q3 FY24 results and outlook:

Building material companies reported weak Q3 results.

Pipes volume/revenue (up 5%/0% YoY) missed our estimates by 3-8% driven by Apollo Pipes Ltd. (up 5%/-6%), Finolex Industries Ltd. (down 10%/8%) and Prince Pipes and Fittings Ltd. (down 2%/12%).

Strong momentum sustained though for Supreme Industries Ltd. (up 17%/9%) and Astral Ltd. (up 15%/7%). Small inventory loss (~100 bps) due to reduction in PVC price towards the end of Q3 hurt margins.

Plumbing and infrastructure verticals continued to drive volumes. Companies are hopeful of volume recovery in coming quarters.

Six wood panel companies under our radar missed revenue/profit after tax estimates by 9%/29% YoY, led by Century Plyboards India Ltd. and Greenlam Industries Ltd., owing to soft demand and elevated timber prices.

Stylam Industries Ltd. clocked 8% YoY dip in revenue, but PAT surged 30% on a strong 22.3% Ebitda margin (up 210bps QoQ; likely to sustain). In MDF, Greenply’s MDF volume came flat YoY (up 15% for Century Plyboards India) with 19.6% Ebitda margin (18.9% for Century Plyboards).

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