OPM rose 70 basis points to 13.6% which saw OP rose 8% to Rs 172.8 crore. Profit from the construction business was nil compared to Rs 53.1 crore in Q1FY19. OP including construction business was down 19% to Rs 172.81 crore.

Other income fell 90% to Rs 54 lakh and interest cost fell 32% to Rs 7.07 crore. As depreciation grew 9% to Rs 51.73 crore, PBT fell 29% to Rs 114.55 crore. Tax provision was credit of Rs 14.04 crore compared to tax provision of to Rs 55.52 crore. PAT rose 23% to Rs 128.59 crore.

Profit in JV jumped 334% to Rs 10.99 crore. Finally net profit rose 30% to Rs 139.58 crore.

H1FY 2020 consolidated results

In H1FY 2020, sales grew 5% to Rs 2707.73 crore. The company sold 206928 tonne of plastic goods against sales of 183080 tonne achieving volume and product value growth of about 13% and 5%, respectively.

OPM fell 80 basis points to 12.6% which saw OP fall 1% to Rs 340.2 crore. Profit from the construction business was nil compared to Rs 53.1 crore in H1FY19. OP including construction business was down 15% to Rs 340.18 crore.

Other income fell 91% to Rs 0.57 crore and interest cost fell 24% to Rs 10.33 crore. As depreciation grew 13% to Rs 101.28 crore, PBT fell 24% to Rs 229.14 crore.

EO gains were nil compared to Rs 55.88 crore. Thus PBT after EO fell 36% to Rs 229.14 crore.

As tax fell 79% to Rs 25.91 crore, PAT fell 14% to Rs 203.23 crore.

Profit in JV rose 176% to Rs 23.48 crore. Finally net profit fell 7% to Rs 226.71 crore.

Mr. M. P. Taparia, Managing Director, The Supreme Industries Limited, said:

The company could overcome the quality issue of composite cylinder. The product is now well accepted in international market. The company is supplying the cylinders to several international markets.

The demand for the pipe system remained robust. The demand in current month in agricultural segment was crippled due to extended rainy season in several states. It is expected that going forward the demand will broaden for all its systems in the country.

Encouraged by the growth outlook The company has increased its investment plan in plastics pipe system in the current year. It is now going to be in excess of Rs. 250 crore which will include putting up a new plant in Odisha and to start Polyolefin pipe fittings and Pex Pipe Systems at Jadcherla.

Expanded capacity of performance packaging film has smoothly gone into production. The company made a breakthrough in several international markets for this product with newer structures for various applications.

The capacity to manufacture Furniture items at Jalcherla is now well established. The demand is slow but with launch of new varieties of products, it is expected that demand will absorb the increased capacity by next year.

The demand for industrial components and protective packaging products remained subdued. The raw material prices remain on bearish path. It is forecasted that the prices have reached close to the bottom. The low polymer prices were partly responsible for lower value growth compare to volume growth.

For the full year, the company expects volume growth to be between 10 to 12%. The Value growth will be lower than volume in this year.

The company has stepped up its investment plan to about Rs. 400 crore in the current year. All the investment plans are going smoothly. The corporate tax reduction has enabled the company to boost its investment ambition without adding any additional debt.

Other details

Average borrowings of the company for the half year ended 30th September, 2019 was Rs. 204.54 crore as against Rs. 223.15 crore for the corresponding period of previous year. Average cost of borrowings as on 30th September,2019 is at 5.89 % p.a. as compared to 8.23% p.a. as on 31st March, 2019.

The Board of Directors has considered the payment of interim dividend for the financial year 2019-20 @ 200 % i.e.Rs, 4 per share of Rs. 2 each and will be paid to the shareholders on the shares held as on the record date i.e. 5th November, 2019.

The stock trades at Rs 1173.