Stocks to Buy: Motilal Oswal Picks 3 Pipe Stocks with Up to 46% Gains

Motilal Oswal Recommends 3 Plastic Pipe Stocks With Upside Potential of Up to 46%

India’s infrastructure boom and rising demand for real estate and urban development have created a fertile environment for growth in the plastic pipe industry.

Riding on this wave, leading brokerage firm Motilal Oswal Financial Services has initiated coverage on three top players in the sector: Supreme Industries, Astral Ltd, and Prince Pipes and Fittings Ltd, all with a ‘Buy’ recommendation.

According to Motilal Oswal, the plastic pipe sector in India has grown at a compound annual growth rate (CAGR) of 10% over the last decade, reaching a market size of ₹54,100 crore in FY24.

Looking ahead, the brokerage anticipates accelerated growth at 14% CAGR between FY24 and FY27, with the sector poised to expand to ₹80,500 crore by FY27.

Why Plastic Pipes?

Plastic pipes have become indispensable in modern infrastructure, driven by their durability, affordability, and resistance to corrosion.

Their usage spans several sectors, including housing, agriculture, water supply, sanitation, and industrial applications.

With a sharp rise in urbanization, increased government spending on rural water supply schemes, and rising consumer preference for quality piping solutions, companies operating in this sector are expected to benefit significantly.

Motilal Oswal believes the sector’s underlying dynamics are ripe for value creation. Below is a detailed breakdown of the brokerage’s top three picks:

1. Supreme Industries Ltd

• Target Price: ₹5,400
• Current Upside Potential: ~22.4%

Founded in 1942, Supreme Industries is one of India’s largest plastic product manufacturers and a dominant player in the plastic piping segment.

It has a strong portfolio across various categories such as pipes, plastic furniture, material handling products, and packaging solutions.

Motilal Oswal expects the company to benefit from strong volume growth and operating leverage. Key projections for FY25 to FY28 include:

• Revenue Growth: 14% CAGR
• EBITDA Growth: 20% CAGR
• Net Profit Growth: 23% CAGR

The brokerage highlights the company’s anticipated volume growth of over 13%, coupled with improved profit margins, as critical drivers of its valuation.

Supreme Industries has been consistently expanding capacity and improving efficiencies, ensuring it remains competitive in a market that is becoming increasingly organized.

The company is also expected to benefit from the rising demand in Tier-2 and Tier-3 cities, where infrastructure development and housing projects are on the rise.

Its wide distribution network and diversified product portfolio provide a significant competitive moat.

2. Astral Ltd

• Target Price: ₹1,800
• Upside Potential: ~19.6%

Astral Ltd has carved out a leading position in India’s piping industry by being the first to introduce CPVC pipes to the Indian market in 1998. Today, it has grown into a diversified enterprise operating across five verticals:

• Pipes & Fittings
• Water Tanks
• Adhesives & Sealants
• Bathware
• Paints

Motilal Oswal notes that Astral has the largest Total Addressable Market (TAM) among its peers—estimated at ₹1.59 lakh crore—giving it ample runway for long-term growth.

Its established brand presence and expansion into adjacent categories (such as adhesives and bathware) have turned it into a consumer-facing company with growing margins.

Projections for FY25–FY28 include:

• Revenue Growth: 16% CAGR
• Operating Profit Growth: 17% CAGR
• Net Profit Growth: 23% CAGR

The company’s focus on branding, dealer expansion, and innovation—alongside forays into newer verticals like paints—continues to strengthen its market position.

Moreover, Astral’s agile supply chain and asset-light expansion strategy are expected to support sustained profitability.

Its wide presence across India and increased rural penetration also position it to gain from public infrastructure initiatives and government-sponsored housing schemes.

3. Prince Pipes and Fittings Ltd

• Target Price: ₹500
• Upside Potential: ~46% (Highest among the three)

Prince Pipes, one of the fastest-growing players in the sector, is currently trading at a discount to its long-term potential, according to Motilal Oswal.

The company operates 7 advanced manufacturing units, has a vast portfolio of 7,200+ SKUs, and a strong distribution network of over 1,500 partners, ensuring deep market reach.

The brokerage highlights Prince’s diverse product range and its strategic focus on expanding its footprint in Eastern India, which remains relatively underpenetrated.

The company is also innovating with new premium product categories, which are expected to enhance brand value and improve margins.

Growth forecasts for FY25–FY28 are particularly strong:

• Revenue Growth: 15% CAGR
• EBITDA Growth: 38% CAGR
• Net Profit Growth: 73% CAGR

Approximately 70% of Prince Pipes’ revenue is tied to the real estate sector, while 25% comes from high-margin CPVC pipes.

As the real estate sector recovers and major infrastructure projects pick up pace, Prince is expected to benefit directly.

Additionally, government initiatives such as Jal Jeevan Mission, Smart Cities, and the Swachh Bharat Mission are expected to spur demand for piping solutions across India.

Prince Pipes is well-positioned to capture this opportunity due to its robust manufacturing and distribution capabilities.

Industry Outlook and Investment Thesis

Motilal Oswal’s bullish stance on these three companies stems not only from their individual fundamentals but also from the tailwinds propelling the broader plastic pipe industry. Key structural factors supporting growth include:

• Increased government focus on housing, water supply, and sanitation
• Urbanization and the rise of smart cities
• Shift from unorganized to organized players in the piping sector
• Rising consumer demand for quality plumbing and piping products

These trends are expected to offer a multi-year growth runway for established players with scale, distribution, and product innovation—criteria that Supreme Industries, Astral, and Prince Pipes fulfill convincingly.

Final Thoughts

The Indian plastic piping industry stands at the cusp of its next growth cycle, powered by public infrastructure investment and robust real estate activity.

Motilal Oswal’s top picks—Supreme Industries, Astral Ltd, and Prince Pipes—not only have strong balance sheets and competitive advantages but also operate in a sector with high growth visibility.

With projected upside potential ranging from 19.6% to 46%, these three stocks offer an attractive opportunity for long-term investors looking to gain exposure to India’s infrastructure growth story.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors are advised to conduct their own research or consult a qualified financial advisor before making investment decisions.