Will building material stocks emerge new comeback kids

Mumbai: Suppliers of building materials such as plumbing pipe, tile, sanitaryware and MDF (medium-density fibreboard) in the organised segments are likely to outperform the market in 2021, according to analysts.Stocks like Prince Pipe, Greenply Industries, Somany Ceramics, Astral Poly Technik, Supreme Industries, Pidilite and Kajaria Ceramics can be good picks for the New Year, they said. An impressive performance by real estate stocks in recent weeks on the back of improving demand situation in the sector augurs well for them.“The organised building material sector is likely to be on a strong comeback trail with branded companies expected to report healthy volume growth in 2021, driven by strong pent-up demand in the renovation or refurbishment segment and an impressive pickup in secondary sales in the real estate sector post-Covid,” said Nehal Shah of ICICI Securities. “Branded categories like plumbing pipes, MDF and ceramic tiles seem poised to outpace the other building material categories in terms of volume growth recovery.”80001912Shares of building materials companies have rallied between 15 per cent and 80 per cent in the last three months. Despite this rally, many of them are considered to have re-rating or turnaround potential in the near term.Tile manufacturers Kajaria Ceramics and Somani Ceramics have rallied 76 per cent and 32 per cent, respectively, in the past three months. These companies will likely benefit from impressive market share gains from Morbi-based players, who are incrementally focusing on exports since the start of the pandemic.Among pipe makers, Astral Poly Technik has gained 42 per cent in three months while Prince Pipes and Supreme Industries have both rallied 15 per cent.

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