Supreme Industries has 25 technologically advanced manufacturing facilities located at various places spread across the country. The company has built-up excellent relationship with its distributors and is also providing orientation to them, in order to ensure proper service to ultimate customers.

Consolidated quarter results

In quarter ended June 2019, sales grew 7% to Rs 1436.83 crore.

OPM fell 220 basis points to 11.6% which saw OP fall 10% to Rs 167.74 crore.

Other income fell 83% to Rs 3 lakh and interest cost fell 8% to Rs 3.262 crore. As depreciation grew 16% to Rs 49.54 crore, PBT fell 18% to Rs 114.59 crore. As taxation fell 39% to Rs 39.95 crore (Tax incidence fell from 46.7% to 34.9%), PAT fell 43% to Rs 74.64 crore.

Profit in JV jumped 108% to Rs 12.48 crore. Finally net profit fell 36% to Rs 87.12 crore.

FY 2019 consolidated results

In FY 2019, sales grew 13% to Rs 5611.99 crore.

OPM fell 280 basis points to 13.0% which saw OP fall 7% to Rs 730.60 crore.

Other income jumped 64% to Rs 7.783 crore and interest cost grew 19% to Rs 26.00 crore. As depreciation grew 10% to Rs 183.54 crore, PBT fell 3% to Rs 582.81 crore.

EO gains were Rs 67.19 crore against NIL. Thus PBT after EO grew 8% to Rs 650.00 crore.

As tax grew 5% to Rs 215.75 crore, PAT grew 9% to Rs 434.25 crore.

Profit in JV fell 59% to Rs 14.38 crore. Finally net profit grew 4% to Rs 448.63 crore.

Other details

Various initiatives taken by the Central and State Governments such as boosting affordable house construction, establishing sewerage & drainage system, drinking water system are all gathering momentum. Recent announcement by Government to provide drinking water in each home by the year 2024 will boost the requirement of plastic pipe system in large volume augurs well for the company's business.

Jadcherla unit has commenced commercial production and started delivering Roto Moulded Tank and furniture products in the market during the first quarter. The company is doubling the Roto Moulding capacity at Jadcherla and finalizing plan to put up HDPE fittings manufacturing capacity at Jadcherla which may go in production in first half of 2020-21. The company will plan to put up plastic pipe manufacturing capacity at Jadcherla complex where initial steps are being taken. New Production facilities of Protective Packaging division are under construction at Jadcherla.

The company is augmenting capacity of HDPE Pipe capacity and putting up injection moulded fitting manufacturing facility at Kharagpur, PVC pipe capacity at Kanpur and Moulded fitting capacity in Jalgaon unit. Most of the capacities shall go into the production during 3rd/4th quarter of the current year and shall be available for full in FY2020-21 onwards.

Total borrowing of the company stands at Rs. 115 crore as on 30th June 2019 as against Rs. 162 crore as on 31st March, 2019. Average cost of borrowings as on 30th June, 2019 decreased to 6.53% per annum as against 8.23% per annum as on 31st March, 2019.

Guidance

The company has maintained its volume guidance of 8-10%, value growth guidance of 12-15% and EBITDA margin of 13.5-14.5% in FY20.

Valuation

The stock trades at Rs 1075.