Conference Call with Supreme Industries Management and Analysts on Q3FY25 Performance and Outlook. Listen to the full earnings transcript.
Plastic Products company Supreme Industries announced Q3FY25 results Standalone Financial Highlights: Total Income: Rs 2533.25 crore compared to Rs 2481.37 crore during Q3FY24, change 2.09%. PBT: Rs 238.08 crore compared to Rs 329.16 crore during Q3FY24, change -27.67%. PBT margin: 9.40% for Q3FY25. PAT: Rs 179.64 crore compared to Rs 247.36 crore during Q3FY24, change -27.38%. PAT margin: 7.09% for Q3FY25. Earning Per Share: Rs 14.14 for Q3FY25. Consolidated Financial Highlights: Total Income: Rs 2518.78 crore compared to Rs 2469.81 crore during Q3FY24, change 1.98%. PBT: Rs 245.41 crore compared to Rs 337.97 crore during Q3FY24, change -27.39%. PBT margin: 9.74% for Q3FY25. PAT: Rs 186.97 crore compared to Rs 256.17 crore during Q3FY24, change -27.01%. PAT margin: 7.42% for Q3FY25. Earning Per Share: Rs 14.72 for Q3FY25. M. P. Taparia, Managing Director, The Supreme Industries, said: Plastic Pipe Systems business growth continues to be adversely affected due to adverse PVC resin prices scenario and demand from infra spend not picking up as envisaged. Considering better demand in the second half of the year in the segments served by the Company, the Company had earlier envisaged 16-18% volume growth for the current year for the Plastic Piping System. The business fared poorly in the third quarter as PVC prices in open market were quite low compared to domestic producer prices and due to extended winter rainfall in South India and some Eastern states. The Company expects good demand from Agri and Housing segments for the last quarter. The entire distribution pipeline has de-stocked seeing the continued fall in prices. As the prices have reached a low level, the Company expects good demand going forward in the current quarter. The Company also expects some improvement in infra sector demand, as this being the last quarter of the financial year. The international PVC prices have stabilized at a low level. The local makers are adjusting their price close to import parity. However, there was a move from local producers to impose Anti-Dumping duty on import of PVC suspension grade resin. The decision from the Finance Ministry is awaited. Thus the PVC resin price trend remains in uncertain arena. Thus, Company is not in a position to give specific volume growth guidance. However, as several brownfield expansion of capacities are in place, the Company with its large portfolio of SKUs in this system is expected to grow 3% to 4% more than the Country growth in plastic Pipe System during this year. All brownfield expansions at various locations of Plastic Piping Systems are progressing smoothly. The Company is well positioned to cater to increased demand of its product with increased available capacity. The company has reached to annual capacity of 8,20,000 M.T. as on 31st December 2024 and with completion of all the expansion plans undertaken in hand, total installed capacities of the Piping System Business Vertical shall reach 9,00,000 M.T. per annum by the end of FY25. Three new greenfield plants for Plastic piping division at Jammu, Bihar and Madhya Pradesh shall be taken up for execution in the coming financial year. Land at all the three places is in Company’s possession and detailed plans for products and capacities are being worked out. Equipment have arrived for PP silent pipe system which shall be launched in technical collaboration with M/s. Poloplast Gmbh of Austria during 1st quarter of FY26. The newly introduced PERT Piping System and PE single wall corrugated pipes are witnessing encouraging response. Plans to increase SKUs in Bath fittings and sanitaryware segment are progressing well and till now the division has reached to 629 SKUs, from 421 SKUs at the beginning of the year. The company is servicing 40 different application based systems and continue to explore more value added systems. The Company continues to remain focused to invest and enlarge the product basket in its piping business and to increase the range of value-added products. The company now has a SKU basket of 14234 numbers in Piping System Business Vertical. The Company has placed orders for all necessary equipment and the work on civil construction has started at its new site at Kanpur Dehat in U.P. for making Windows. In the first phase, Company has planned to put entire window making facilities at Kanpur and cater to customers in Uttar Pradesh, Uttarakhand and NCR. The Company expects to launch and supply Windows in the H1FY26. The business of Cross Laminated Film is showing improved performance with better capacity utilization. The division has also participated in institutional business and bagged good orders which are under execution. Resultantly the division expects about 20% volume growth in this business segment for the year with improved profitability. Trials have been successfully carried out for the newly developed Cross Plastic Film and samples thereof have been sent to laboratory for testing & certification as well as to potential customers for their evaluation. The Company continues to expand its range and has introduced various new models of chair & cabinet in its furniture segment. 12 new models have been introduced in the first nine months of FY25. The division continues to add showrooms to improve awareness of its range of premium products. Total No. of showrooms has reached 337 by end of December’24 from 308 as on 31st March’24. Focus on strengthening distribution channel and adding more retail outlets is continued. In the Industrial Component division, business conditions remain moderate. However, Company expects demand scenario to further improve in sectors of home appliances & white goods which constitutes larger part of this business. It is also working to expand its customer base and develop the business in new sectors. With the revival in the business scenario of various appliances customers, the division expects better prospects going forward. The Material Handling Division remains focused on introducing new products and also investing in new machines and moulds. Injection moulded pallets are seeing good growth and division continues to add new products in its range of pallets and dustbins. Presently the entire range of pallets are being manufactured at one location in Maharashtra. Going forward, the division plans to increase Pallet’s manufacturing locations and likely to commence from March 25. Equipment for Bubble Guard Board shall arrive by end of first quarter of FY26 and likely to be in production during July-September quarter. The division continues to strive to enlarge its customer base and product portfolio paving the way for moderate growth. Composite LPG cylinder division continues to cater to existing overseas customers and also participates in various export enquiries. Supplies against new LOI received for 10 Kg. cylinders from Indian Oil corporation Limited (IOCL) are taking place regularly and shall be completed by February 2025. The division expects to receive orders for further quantities in continuation of existing LOI. Work on standard design of 14.2 kg. Cylinder for all Oil Marketing Companies (IOCL, BPCL & HPCL) is under progress and expected to generate good business during FY26 and thereafter. Commercialization of newly developed CNG Cylinders is likely to happen during January-March quarter of this year. The Protective Packaging Division has enhanced its capacity utilization and its focus on developing customized solutions is working well. The division is continuously increasing its fabrication capacities in various geographies to cater to increased demand. Expansion activities undertaken are progressing well and shall be fully in place by end of FY25. Negotiations for a suitable location for a new greenfield site near the port in the western region, to cater to export opportunities and domestic demand, has been initiated and likely to be concluded by first quarter of FY26. The Performance Packaging Division continues to utilize its capacities optimally and work on improved product mix and post extrusion value added products with minimal investment. Export opportunities remain the focus area for better value addition. Looking at the business outlook and opportunities, the Company has planned and committed the highest capex (including carry forward commitments) of around Rs 1500 crore. Total cash outflow towards capex has been Rs 718 crore during first nine months and is likely to reach around Rs 1000 crore for the year. Entire Capex outflow shall be funded from internal accruals. Result PDF