Sharekhan Broker Research reports

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.

Strong growth continued across its proprietary and banca channel which resulted in APE growth of ~21% / y-o-y in Q2FY25 although APE growth lagged estimates.

Net earnings were almost in line due to a better performance by retail segment except MFI, higher other income, lower opex and credit cost. It also kept RoA steady.

Management has reduced its volume growth guidance for FY2025 to 9% y-o-y from 12% y-o-y, anticipating lower industry growth rate, while it continues to eye volume growth of 1.5x that of industry growth.

Standalone revenue stayed in-line, although volume growth marginally lagged for Q2FY2025. Operational profitability miss was led by operating de-leverage.

Earnings grew by a mere 2% y-o-y on the back of higher provisions although operating profits rose ~11% y-o-y.

HDFC Bank reported broadly in-line performance with strong deposit growth in Q2FY2025. Given the transition period, management’s relentless focus is towards balance sheet management and stability in return ratios.

KMB reported a weak performance in Q2FY2025 although on expected lines led by NIM contraction, weak business momentum, and higher slippages in turn led to uptick in credit cost.

Polycab reported strongest-ever Q2 with a stellar revenue growth of 30% y-o-y. Revenue growth was contributed by strong growth across segments C&W (24%), FMEG (21%) and Others (190%). Topline strongly beats our estimates.

Reported revenues stood at $103.6 million, up 4.7% q-o-q/10.2% y-o-y in constant currency (CC) terms, beating our estimates of $101.5 million.