With Government’s Focus On Affordable Housing Schemes, Experts Predict Increasing Demand of Plywood and Laminate Stocks in India
DELHI: Despite a downcast of the stock market and impassive sentiment towards the real estate sector, shares of plywood, laminates and decorative veneer firms has caught investors' attention deeply. The stock price of plywood companies, if the media reports are to go by, have witnessed 25-70% growth in the last three months as against 11% rise in Sensex.
Experts are of the view that with the government’s constant focus on low-cost housing/residential projects and infrastructure, demand for laminates and plywood is likely to grow higher than expected in coming days.
“We assume the demand scenario will be consistent and will become even stronger in medium-to-long term due to strong growth in the real estate industry, growing middle class segment,Indian furniture market, better per capita income and increasing urbanisation," said analysts
To be precise, complete market size of decorative plywood and laminates in India is about seven thousandcrore with the small players contributing to form approximately 25 to 30% of the market in 2015 when compared to 40% in2013. It clearly reflects thesteady shift towards the organised market.
Also the consumption of Indian plywood industryis estimated to have grown at an increasing level of 15-20% for the organised segment as compared to the overall industry growth of 6-7% over the past few years. This has been due to the fact that there is constant focus on urbanisation and consumerism. Also, the laminate and plywood industry is an established sector in India.
When it comes to quality parameters of the products, the organised sector is known or focusing on high-end features, innovative designs, lower input prices which have resulted in higher margins for laminates and decorative veneer companies in the last few quarters. This is the main concern customers are shifting from the unorganised market to the organized marketing.
Subsequently, the plywood industry leaders reportedly have witnessed an effective growth of 4% for the quarter ended March 2016, above the market expectations of 3% growth. Given the current scenario, experts expect increasing demand of plywood and laminate due to the government’s focus on launching affordable housing and residential projects in the country.