J.P. Morgan India FTM 29 Jun 26 India: Data watch; India Pipes; India Consumer; India Financials; HDFC Bank and More

Research evidence excerpt

J.P. Morgan India FTM 29 Jun 26 India: Data watch; India Pipes; India Consumer; India Financials; HDFC Bank and More

Asia Pacific Equity Research

India First to Market 29 June 2026

Top Stories

India (Sajjid Z Chinoy)

• Rainfall tracking 42% below Long Period Average

• July–August monsoon more decisive for final acreage and yields

• Food inflation: Buffer stocks to help cereals; pulses vulnerable

• Next week IP at 3.7%oya

| India Pipes (Rishabh Gupta)

Near-term PVC risk + Astral’s demerger announcement: Downgrade ASTRA and SI to Neutral

While Astral’s announced demerger frees up the mature 'Plumbing' segment (~14-15% PBT margin, 18 NWC days,~24% RoE

in FY26) to be more aggressive on capital allocation, margins and channel incentives, it could negatively impact growth

prospects of the still relatively sub-scale 'Paints & Adhesives’ segment (~4-5% PBT margin, 39 NWC days, ~5% RoE in FY26),

where capex and A&P were being supported by the Plumbing business. Mathematically, ‘Paints & Adhesives’ would be ~15%

of consol PBT in FY28E and assuming 25x-35x FY28E P/E for the segment, the consol valuation drag would be restricted to 5-

8%; however, cost/cash allocations remain to be seen. This does pose a risk for Supreme (SI), as potentially higher growth

focus by Astral in ‘Pipes' could be a growth drag for Supreme, and makes it difficult to underwrite margin improvement at SI.

Given the uncertainty, and the fact that near-term domestic PVC prices are likely to correct further (driving inventory losses/

channel de-stocking) at a time when ASTRA/SI start lapping a tough volume base (in 2Q), we recommend staying on the

sidelines, and downgrade both to Neutral (from OW). Structurally, we continue to like ASTRA >SI and do not view the