The company has abandoned its plan to venture into manufacturing of composite pipes for Oil & Gas exploration and written of the cost of the project amounting to Rs 7.68 crore which is considered as EO expense for quarter ended Mar'16 as compared to Nil for quarter ended Mar'15. Thus, PBT after EO for Mar'16 quarter stood at Rs 160.94 crore, up by 10% YoY. Total tax being up by 24% to Rs 62.60 crore, PAT before Share of Profits from Associates was up by 2% to Rs 98.34 crore. There was a profit of Rs 16.22 crore from share of associates for Mar'16 quarter as compared to profit of Rs 6.14 crore for Mar'15 quarter. Thus, the consolidated PAT for Mar'16 quarter stood at Rs 114.56 crore, up by 12% YoY.

Mr. M P Taparia MD of Supreme Industries said: "The polymer prices hovered at a lower level during most part of the year. The polymer consumption in the country has grown by around 14% in volume terms close to 2 times GDP growth during the year. Such consumption driven growth has not been seen in the last decade. The country has consumed around 13.7 million tons of plastics in last year compared to around 12 million tons in the previous year. This auger well for the company's growth plan.

The company is confident of meeting its capital expenditure requirements through its internal accruals and suppliers credit. Company has no plans to increase its borrowing levels. It wishes to become virtual debt free in next couple of years.

Consolidated performance for 9 months ended Mar'16

Supreme Industries reported consolidated net sales of Rs 2974.84 crore for 9 months ended Mar'16, which was up by 4% on YoY basis. OPM was up about 420 bps to 15.5%, thus resulting in a 42% increase in OP to Rs 461.14 crore. Profit from construction business stood at Rs Nil for the 9 months ended Mar'16 and for 9 months ended Mar'15 it stood at Rs 83.55 crore. Thus, OP including construction profit stood at Rs 461.14 crore, up by 13% YoY.

Other income stood at Rs 0.95 crore. Interest costs was down by 41% to Rs 27.57 crore and depreciation was higher by 1% to Rs 104.57 crore thus resulted in PBT being up by 27% to Rs 329.95 crore. The company has abandon its plan to venture into manufacturing of composite pipes for Oil & Gas exploration and written of the cost of the project amounting to Rs 7.68 crore which is considered as EO expense for 9 months ended Mar'16 as compared to Nil for 9 months ended Mar'15. Total tax being up by 33% to Rs 117.75 crore, PAT before Share of Profits from Associates was up by 20% to Rs 204.51 crore. There was a loss of Rs 8.31 crore from share of associates for 9 months ended Mar'15 as compared to profit of Rs 16.74 crore for 9 months ended Mar'16. Thus, the consolidated PAT for 9 months ended Mar'16 stood at Rs 221.25 crore, up by 36% YoY.

Other developments

The company expects to incur a capex of about Rs 250 crore for 12 months period ended Mar'17. This includes 20000 tons annual capacity of PVC pipes at Jalgaon and new extrusion lines for PVC pipes and PE pipes at Kharagpur, land for performance packaging films, energy efficient machines in plastic piping and furniture division, new range of product offerings in plastic piping systems, furniture products, material handling products, roto moulded products and bathroom fittings, to invest in balancing equipments and automation at all plants and to increase the capacities of protective packaging products at Malanpur and Hosur and to add varieties of other products.

FY'17 seems to be the transforming year for the composite cylinder division and the company may start reaping the benefits of its investments. The company has received initial educational order from HPCL for 2 sizes 5 kg and 10 kg. The dispatches are planned to be made in April 2016. The company has also received order for 7.5 kg and 15 kg cylinders which is under development and would be ready in 2^nd quarter of FY'17.

Value added products share stood at 36.7% for 9 months ended Mar'16 as compared to share of 34% share for the 9 months ended Mar'15 period.

The board of directors has declared 2 interim dividends totaling to Rs 7.50 per equity share of face value of Rs 2 each. The board has considered it prudent to keep the same as total dividend for the period under review.

The company shall be closing its year at March every year from now onwards. Consequently the current financial year will be a 12 months period ended March 2017.