Supreme Industries Ltd. share price target

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....

Supreme Industries Ltd.'s (SIL) Q2FY21 result was a beat to our as well as consensus estimates on all parameters. The company reported net sales of Rs13.7bn, increased by 8.2% YoY, while EBITDA came in at Rs2.5bn, a robust growth of 48.1% over Q2FY20. It reported net profit of Rs1.4bn, higher by 15.4% YoY. The management guided that SIL would remain focused on new products launches and capacity expansion to accelerate further the growth momentum in all products segments. We have revised our net sales/PAT estimates by 18%/28% and 11%/6% respectively over FY21E/FY22E and introduce FY23E financials. The stock had a sharp run up recently which caps its upside from current level....

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...