Supreme Industries Ltd. share price target

Supreme Industries Ltd.'s (SIL) Q1FY26 result was below our estimates on key parameters. During the quarter the Plastic Pipe Systems business growth was adversely affected due to unfavorable PVC resin prices scenario and demand from infrastructure spend not picking. The segment was also affected due to 20 days early break off monsoon. This resulted in loss of agriculture piping system business due to fall in prices in the quarter also there were inventory loss affecting profitability in the quarter. SIL reported net sales of Rs26bn, down by 1% YoY, while EBITDA came in at Rs3.1bn, declined by 17.7% over Q1FY25. It...

Supreme Industries (SI) reported a muted quarter amid the ongoing challenges of volatile pricing and the early onset of monsoon, affecting demand.

Supreme Industries' (SI) Q1FY26 volume growth was 5.7% below our estimates, due to lower volume in the plastic pipe segment (up 6.1% YoY against our est. of 7.3%) due to early monsoon, leading to lower demand in the agriculture piping segments, delay in ADD on PVC resin resulted de-stocking in the channels. EBITDA margin contracted by 250bps YoY with decrease in EBIT/kg to Rs 10.6 (down 35.9% YoY) in pipe segment mainly due to inventory loss of Rs 500mn. Adjusting for the inventory loss PAT was in line with our estimates in Q1FY26. The management has revised its FY26 guidance, raising P&F volume...

The combination of reduced government infrastructure spending, a slowdown in the real estate sector, and persistent price fluctuations in PVC led to destocking, adversely impacting overall volumes and profitability. EBITDA margins contracted by 256 bps YoY to 13.8%, largely attributable to an...

Supreme Industries’ Q4 revenue remained muted at Rs30bn, up just 0.6% y/y, as overall volumes sold rose a meagre 2.3% y/y. Profitability was impacted as PVC pricing environment remained uncertain, with a downward bias deferring filling of channel inventory and under absorption of fixed overheads.

Supreme Industries (SI) reported Q4FY25 blended plastics volume growth of 2.3% YoY (6-year CAGR of 9.8%) with pipes segment reporting modest 2.2% YoY volume growth (6-year CAGR of 11.7%) on a high base YoY. Blended EBIT/kg contracted 23.1% YoY to INR16.5 (+19.2% QoQ) as pipes EBIT/kg fell 27.8% YoY to INR 13.3 (+22.3% QoQ), partly due to inventory losses.

Consolidated revenue stood at Rs. 3,027 crore, flat y-o-y, due to a 2% y-o-y fall in realisations, while total volumes grew at just 2.3% y-o-y in Q4FY25.

Supreme Industries' (SI) Q4FY25 volume growth was 2.3% below with our estimates, due to lower volume in the plastic pipe segment (up 2.2% YoY against our est. of 5%) because of low demand in plumbing and infra segments, delay in ADD on PVC resin resulted de-stocking in the channels. EBITDA margin contracted by 260bps YoY with decrease in EBIT/kg to Rs 13.3 (down 27.8% YoY) in pipe segment mainly due to inventory losses in pipe segment. SI expects topline to reach Rs 12bn by FY26 driven by volume growth of 10-12% in pipe segment with overall EBITDA margin of 14.5-15.5%, also plastic pipe segment...

Missed EBITDA estimate by 3% on weak pipe volume (+2.2% YoY vs +30% guidance), but beats PAT estimate by 3.5% on lower tax rate

Wavin acquisition will enable SI to gain market share in North and South India

We downward revise the rating to Accumulate' and our earnings estimates for FY25/FY26/FY27E by 3.3%/9.4%/9.9%, and revise TP to Rs3,748 (Rs5,040 earlier), based on 35x FY27E earnings (42x earlier). We recently met the management of Supreme Industries (SI) to get clarity over P&F volume growth guidance and outlook on PVC resin pricing scenario for the near to long term. The company indicated that it will be able to achieve only single-digit P&F volume growth in FY25, as against the guidance of 15-16%. Also, EBITDA margin in Q4FY25 is likely to be similar to that in Q3FY25, due to lower PVC resin prices...

Supreme Industries Limited (SIL) reported consolidated revenue of Rs. 2,510 crore (up only 2.5% y-o-y) on account of flattish realizations (0.5% decline y-o-y) while total volume growth was also soft at 3% y-o-y.

We retain a Buy on Supreme Industries Limited (SIL) with an unchanged PT of Rs. 5,700. The recent correction due to falling PVC prices provides a good buying opportunity

In Q2FY25, Supreme Industries (SI) reported disappointing operational performance. Blended plastic volume was flat YoY with pipes volume being flat too YoY (-27.1% QoQ; 5-year CAGR of 8.6%).

We retain a Buy on Supreme Industries Limited (SIL) with a revised PT of Rs. 5,700, lowering our valuation multiple. Stock price correction of over 15% in past few days provide buying opportunity.