Established players in the pipe industry have good OPMs. Also, the opportunity size is bigger when compared to the ‘Building Products’ business. Currently, they aspire to reach 2,000 Cr. topline in the next 4~5 Yrs. Since outsourcing is not an option for this line of business, capex is unavoidable. After a certain scale, improving OPM will be the focus and possible due to inhouse mfg. In my opinion, entry into the pipe segment was/is a good business decision. However, they shall prune retail and CAB segments at the earliest. Established players in CAB product lines fight hard on the basis of pricing, making uninspiring OPMs.
Disc: No position. All the above are personal opinions.
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