Demand, margin woes keep home décor stocks out of vogue

The home décor sector, which includes companies that produce plastic pipes, ceramic tiles, and wood panels, is facing significant challenges. Weak consumer demand, lower realizations, and margin pressure have depressed earnings.

- Harsha Jethmalani

In the past year, shares of companies like Finolex Industries, Prince Pipes & Fittings, Kajaria Ceramics, Somany Ceramics, Greenply Industries, and Greenpanel Industries have fallen 20-42%. On an aggregate basis, 13 building materials stocks under coverage of BoB Capital Markets saw muted revenue performance for the tenth straight quarter, down 0.2% year-on-year (y-o-y) in Q1FY26. EBITDA margin compressed 204 basis points (bps) to 11%. High discounts offered to dealers across segments amid elevated competition in a soft demand environment hurt the sector's margins.