Results above estimates on revenue front as there was an overall revival seen in volumes across segments. Gross margins expanded by 425 bps YoY driven by higher realizations, better product mix and...

Background: Supreme Industries (SI) is a plastic product manufacturer and the largest plastic processor in India, processing over 0.37mn MT annually. Company has four business verticals i.e. Plastic Piping (55%), Packaging Products (21%), Industrial Products (16%) and Consumer Products (7%). SI has 22 manufacturing plants situated across India. Company enjoys a significant market share across its business verticals; Plastic Piping (9.48%), Industrial Products (15%) and...

Better product mix and good demand drives topline Q2FY21 topline growth at 8% YoY at ~| 1375 crore was largely in line with our estimates. The plastic piping, packaging, industrial product categories revenue increased ~4%, ~11%, ~8% YoY to | 847 crore, | 220 crore, | 182 crore, respectively. The valued product category revenue growth was at 9% YoY to | 533 crore indicating good demand of premium product categories as well. The improved product mix led to a sharp rise in realisation by ~7% YoY in Q2FY21 while packaging & industrial products volume grew ~11% &...

We upgrade SIL to Hold from Sell as we upgrade our earnings estimates given significant turnaround in earnings post Covid-19. Q2FY21 Revenue & PAT grew by 8% & 25% YoY respectively, led by recovery in demand and higher operating profit....

The company reported strong outperformance in revenues, OPM and net profitability in Q2FY2021. Cash surplus further improves. October till date continued to see y-o-y growth across all business verticals. The company remains optimistic on rural, tier III, tier IV economies along with demand generation from the affordable housing segment. SIL is one of the fastest to recover in post lock-down era in the building material space....

Scarcely helped by the pandemic, Supreme Industries reported most of the least alluring outcomes in recent past for its plastic goods volumes tumbled but by a little charming 19.4% to 91451 mt compared to 113428 mt in the year ago period. Consumer products and industrial products bore much of the brunt for they published volume decline of 70.5% and 54% respectively. Hardly weakish demand for agri-pipes, particularly rural, Tier III and Tier IV cities - boosted by GOI robust investment in infrastructure largely helped circumvent no unabysmal stress in demand...

Background: Supreme Industries (SI) is a plastic product manufacturer and the largest plastic processor in India, processing over 0.37mn MT annually. Company has four business verticals i.e. Plastic Piping (55%), Packaging Products (21%), Industrial Products (16%) and Consumer Products (7%). SI has 22 manufacturing plants situated across India. Company enjoys a significant market share across its business verticals; Plastic Piping (9.48%), Industrial Products (15%) and...

EBITDA margin declined by 50bps YoY to 11.1% on account of suboptimal revenue growth & weak operating performance. Q1 volume de-grew by 19% YoY, but we expect revival in revenue growth from H2FY21E, led by revival in rural & agri demand and gradual pick-up in business as Covid-19 related issues moderate. Though we are positive on long term growth outlook of SIL, the current premium valuation is not sustainable. We value SIL at P/E of...

Pent up demand in June 2020 drives recovery in Q1FY21 Volume growth was down ~19% YoY in Q1FY21 with a sharp decline in the volume of industrial, consumer product categories by 54%, 70%, respectively. However, strong pent up demand in June 2020 in the piping and packaging products categories restricted volume fall in the respective categories to the tune of ~12%, ~20%, respectively. While the company has gained market share in the piping products during Q1FY21, its cross laminated films category grew 40% in June 2020. Supreme sees good...

Revenues were flat YoY to Rs 55.1 billion in 2020. Despite the challenging external environment, it delivered strong gross margins of 35.1% YoY which was a growth of 315 bps. Operating cash flow for FY20 was Rs 5,371 mn as compared to Rs 5,557 mn in FY19. Free cash flow to the firm in FY20 was Rs 2,974 mn as compared to Rs 2,297 mn in FY19. Overall YoY volume...

Background: Supreme Industries (SI) is a plastic product manufacturer and the largest plastic processor in India, processing over 0.37mn MT annually. Company has four business verticals i.e. Plastic Piping (55%), Packaging Products (21%), Industrial Products (16%) and Consumer Products (7%). SI has 22 manufacturing plants situated across India. Company enjoys a significant market share across its business verticals; Plastic Piping (9.48%), Industrial Products (15%) and...

Supreme Industries Ltd (SIL) is India's leading player in plastic products; the wide range of offering includes Plastic Piping system, Packaging, Industrial and Consumer products . We upgrade to Accumulate, given improvement in margin profile driven by better product mix & lower cost. We expect revival in revenue growth from H2FY21E, led by rural & agri demand. Q4FY20 Revenue de-grew by 6% YoY, but PAT grew by 4% YoY on account of higher operating margin....

Supreme's packaging, industrial business performance in FY20 (down 8%, 24% YoY in FY20E, respectively) was impacted by low pricing in cross laminated films products, slowdown in the automotive industry. However, the strong performance of piping business in H1FY20 helped the company to clock segment revenue growth of 9% in FY20 and helped mitigate poor show of industrial segments, to some extent. We believe low construction and infra spending coupled with slow demand recovery of industrial products categories would weigh on volume growth in FY20-22E (we model...

Supreme Industries (SI) reported below-estimated Q4FY20 revenues (7% YoY) due to a 9% lockdown-led volume decline.

Supreme Industries Limited (SIL) delivered in-line revenue and net profit performance, while EBITDA margin beat our estimates led by lower input cost, higher contribution of value-added products and price hike in CPVC. Revenue declined by 6.6% y-o-y to Rs. 1,430.5 crore, in-line with our expectations, owing to substantial reduction of operations at various plants due to outbreak of COVID-19. EBITDA margins improved by 590 BPS y-o-y to 19.1%, exceeding our estimates, led by better product mix, higher contribution of value-added products, good inventory gains and support...

Our interaction with managements and dealers indicates significant prebuying activity of consumer goods during January-February 2020 on fears of supply related issues from China. While companies have secured supplies to avoid any disturbance in sales in Q4FY20, demand was negatively impacted in March 2020 owing to holiday and post that lockdown across countries. We also believe a late recovery in demand for consumer goods will also impact Q1FY21 performance due to 1) shortage of workers (due to heavy migration), 2) shift in focus on essential goods compared to discretionary products and 3) streamlining of supply chain....

Buttressed by propitious raw material prices, operating profit surged by an blistering 25.8% to Rs 220.93 crs last quarter compared to Rs 175.65 crs in the same quarter a year ago, unwearyingly resuscitating OPMs to 16.9% from 12.5%, Not immodest rise in depreciation (Rs 51.54 crs Vs Rs 45.48 crs) help pretax earnings to expand by 25.3% and post tax...

Supreme Industries Ltd (SIL) is India's leading player in plastic products; the wide range of offering includes Plastic Piping system, Packaging, Industrial and Consumer products. We upgrade to Hold, given improvement in margin profile driven by...

Supreme Industries' non-core business viz. industrial & consumer product business reported revenue decline of 21.3% and 3.4% YoY (25% and 5% YoY in 9MFY20), respectively. On the other hand, the packaging product category reported flattish revenue growth in the packaging product category during Q3FY20 (down 3% YoY in 9MFY20). While the industrial product category was marred by muted demand for automotive components, the consumer & packaging segments were impacted by competition in the respective product categories, respectively. On the piping front, despite...