Supreme Industries Q1 Results Review - Volume, Margin Miss; Market-Share Gain To Sustain: Systematix

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Systematix Research Report.Supreme Industries Ltd.’s Q1 volume/revenue/Ebitda/profit after tax (up 17%/11%/20%/27% YoY) came 6-15% below our estimates. Pipes volume grew 20% YoY (40% in CPVC); Ebit/kg came flat YoY (down 11% QoQ at Rs 16.5, 12.4% margin). Volatile PVC resin prices impacted volume in June as channel kept below normal inventory. Blended Ebitda margin stood at 14.7% (down 162 basis points QoQ). Inferior product mix (agri) impacted margin. No inventory gain was affected in Q1. After 33% surge in pipes volume growth in FY24 (versus 13.7% growth for industry), management’s ambition to grow 25-30% in FY25 (versus 12-15% for industry) is quite encouraging. A Rs 15 billion capex plan for FY25 (including Rs 5 billion c/f capex) will enhance total capacity to over one million tonne (led by pipes capacity of 835 kt). .We maintain our earnings estimates and expect 19%/21%/20% CAGR in revenue/ Ebitda/PAT over FY24-26E (FY19-24: 13%/15%/19%), on strong 18% volume CAGR and normalized Ebitda margins (15.5%+). Despite high capex, Supreme Industries’ strong free cash flow (~Rs 7 billion annually) and return on invested capital (~38% in FY26E) will sustain. On scrip’s rich valuation (~47 times FY26E P/E), we maintain Hold with an unchanged target price of Rs 5,215 (45 times core FY26E EPS)..Click on the attachment to read the full report:.TBO Tek - A leading Global Travel Distribution Platform; Anand Rathi Initiates Coverage With A Buy.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Supreme Industries Q1 Results Review - Volume, Margin Miss; Market-Share Gain To Sustain: Systematix

Continued large capex to support leadership position, says the brokerage.

NDTV Profit

NDTV Profit

Follow Us

DOWNLOAD THE APP

Supreme Industries Q1 Results Review - Volume, Margin Miss; Market-Share Gain To Sustain: Systematix

Continued large capex to support leadership position, says the brokerage.

Choose a plan

Follow Us

DOWNLOAD THE APP