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Supreme Industries reported consolidated net sales of Rs 1471.26 crore for Mar 18 quarter up by 15% YoY. The company has sold 103215 MT of plastic goods a volume growth of 8% for the Mar 18 quarter on YoY basis. Value added products account for around 36% of total sales for Mar 18 quarter.
OPM stood at 19.5%, up by 80 bps, thus resulting in the OP growth of 20% to Rs 286.76 crore. Other income stood at Rs 3.7 crore up by 44% YoY. Interest costs and depreciation stood at Rs 5.59 crore and Rs 41.37 crore respectively, thus resulted in PBT of Rs 243.50 crore up by 23% YoY. Total tax stood at Rs 77.36 crore up by 7% YoY, thus PAT before Share of Profits from Associates stood at Rs 166.14 crore up by 32% YoY. There was a profit of Rs 12.17 crore from share of associates for Mar 18 quarter as compared to Rs 20.85 crore for Mar 17 quarter. Thus, the consolidated PAT for Mar 18 quarter stood at Rs 178.31 crore up by 22% YoY.
Mr. M. P. Taparia, Managing Director, The Supreme Industries Limited, said:
The effect of Demonetization, GST and RERA looks to have settled down to a large extent. The economy is moving to formal sector slowly, but surely from informal sector. The several initiatives taken by Government to boost rural income and infrastructure are now fructifying to boost business in several segments which are catered by the Company. The Company, therefore, envisaged a faster growth in business from FY19 and beyond.
Due to hardening of Polymer Prices and lack of new capacity build up of the PVC resin all around the world, the PVC prices have moved to higher band. For the year 2019-20, it is expected that the PVC price trend will remain on higher side. In spite of increase in Crude prices, the prices of Polythene will move to a lower level over the year as several new plants are starting in USA based on the low feed stock of Shale gas. Overall, the polymer prices will remain affordable.
Performance for 12 months ended Mar 18
Net sales for 12 months ended Mar 18 stood at Rs 4966.03 crore up by 11% YoY. OPM was lower by 130 bps to 15.8% thus restricting the OP growth to 3% to Rs 787.11 crore. Other income was lower by 7% to Rs 4.75 crore. Interest cost was lower by 28% to Rs 21.92 crore and depreciation was higher by 8% to Rs 167.15 crore thus resulting in a PBT growth of 3% to Rs 602.79 crore. After providing total tax of Rs 205.70 crore, flat on YoY, PAT before share of profit from associates stood at Rs 397.09 crore up by 5% YoY. After providing profit from share of associates of Rs 34.66 crore, consolidated profit for 12 months ended Mar 18 stood at Rs 431.75 crore flat on YoY basis.
Capex plans
Considering the better business growth potential going forward the Company has
increased investment plan to around Rs 450 crore in this year as compared to Rs.
350 crore as planned in the beginning of the year. Out of the above investment plan
of Rs.450 crore, the Company incurred Capital Expenditure (Capex) of Rs. 260
crore. The balance committed investment will go in production in the year 2018-
19.
During the current year i.e. 2018-19, the Company envisages Capex in the range of
about Rs. 300 to 350 crore, mainly on the following:
• Taking effective steps to put up a new Unit at Assam
• Start a Greenfield Plastics Product Complex in AP. by acquiring land and
initiating preliminary action.
• Put up a plant to make Protective Packaging Product at Jadcharla
• Put up plastic pipe manufacturing at Jadcharla
• Increase HDPE plant capacity at Kharagpur
• Put additional Roto Machines and moulds at different locations
• Add moulds and moulding machines in Pipe, Furniture and material handling
division
• To increase capacity of Industrial components business
• To increase capacity of Protective Packaging Products
• To invest in automation.
The Company shall continue to finance its Capex programme through internal
Composite cylinders
The much awaited BIS Standards is complete and BIS 16646 has been published for
Type IV composite cylinders. This was necessary so that oil market companies can
now take effective steps to introduce composite cylinders in Indian market.
It is encouraging to note that Bangladesh has been using cylinders for last one year and the Company is hopeful of getting order for larger quantities in the current year.
The Company has developed 15.6 Kg and 20 Kg Cylinders and got approval from
TUV, PESO and KGS.Company has acquired 10% business interest in HPC Research
S.R.O. a startup company focusing on R & D in Composite Cylinders in the Czech Republic which will strengthen its R & D footprint in the field of Pressure Vessels.
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