Supreme Industries Ltd. share price target

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...

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...

After a disappointing H1FY20, particularly on margins front, Supreme Industries Ltd.'s (SIL) Q3FY20 result was a positive surprise. The company's reported Net sales was in line with our estimate, however, EBITDA and PAT were substantially above led by higher share of value added products in total sales. Though NSR for piping and consumer products is still a laggard compared to Q2FY20 as well as Q3FY19, packaging and industrial products segments have done phenomenally well. SIL reported Net sales at Rs13.7bn (+8.1% QoQ/-2.6% YoY). Raw material prices softened in Q3 and aided EBITDA, which came in at Rs2.2bn (+27.85 QoQ/ +25.8% YoY). PAT stood at Rs1.2bn (4.6% QoQ/ +52.4% YoY). The management has revised its EBITDA margin guidance...

Sector: Plastic /Mid-Cap | Earnings Update 2QFY20 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 Consumer Products (13%)....

Supreme Industries' plastic division (excluding construction business) recorded value growth of ~3% YoY led by 12% volume growth during Q2FY20. The company's piping division (~64% of topline) recorded a strong performance with volume, value growth of 20% and 19%, respectively. However, the performance of industrial, packaging and consumer products was hit by low demand and strong competition in Q2FY20. Plastic segment EBITDA margin increased ~100 bps YoY to 14.5% in Q2FY20. The strong margin was on account of inventory gains and change in product mix during...