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IDBI Capital Report
Supreme Industries Ltd.’s Q4 FY24 result was ahead of our estimates on key parameters, primarily led by higher sales volume. The management indicated sales volume in pipes to be ~20% in FY25E.
Further, the company will focus on capacity expansion to cater to healthy demand dynamics.
Supreme Industries reported net sales of Rs 30 billion, increased by 15.8% YoY, while Ebitda came in at Rs 4.9 billion, higher by 2.2% over Q4 FY23. It reported net profit of Rs 3.5 billion, a healthy growth of 14.3% YoY.
We believe the company will continue its healthy double digit growth on net sales over FY25E/FY26E driven by positive demand outlook, expanded capacity and Supreme Industries’ extensive distribution reach.
Post sharp run up in the stock price, potential upside is capped from current level. Hence we downgrade the stock to Hold with a revised target price of Rs 4,786 (earlier Rs 4.765), assigning 40 times price-to-earnings ratio on FY26E.
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