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Supreme Industries reported consolidated net sales of Rs 1107.42 crore for Dec'16 quarter up by 12% YoY. OPM stood at 16.7%, thus resulting in an OP growth of 19% to Rs 184.79 crore. Higher sale of value added products and lower base of previous quarter has helped in overall improvement in margins and thus OP. Other income stood at Rs 0.40 crore. Interest costs and depreciation stood at Rs 8.47 crore and Rs 38.69 crore respectively, thus resulted in PBT of Rs 138.03 crore up by 20% YoY. Total tax stood at Rs 47.85 crore up by 25% YoY, thus PAT before Share of Profits from Associates stood at Rs 90.18 crore up by 18% YoY. There was a profit of Rs 10.62 crore from share of associates for Dec'16 quarter as compared to Rs 7.58 crore for Dec'15 quarter. Thus, the consolidated PAT for Dec'16 quarter stood at Rs 100.80 crore up by 20% YoY.
Please Note: The company adopted the new Indian Accounting Standard from April'16 onwards. Figures for the 9 months ended Dec'15 period are as per Old AS and are not comparable on YoY basis. Further, the company also changed its financial year from April to March every year from FY'17 onwards and thus FY'16 was a financial year ended 9 months period ended Mar'16.
For 9 months ended Dec'16, net sales stood at Rs 3179.63 crore with OPM at 16.3% resulting in a OP of Rs 519.25 crore. Other income stood at Rs 2.56 crore. Interest and depreciation stood at Rs 26.84 crore and Rs 113.12 crore. After providing for share of profits from associates of Rs 32.88 crore, PAT for 9 months ended Dec'16 stood at Rs 282.23 crore.
Mr. M P Taparia MD of Supreme Industries said: "At the beginning of the 3rd quarter, company was hopeful of achieving more than 15% volume growth in anticipation of better Khariff crop, introduction of several new products by the company, prices remaining affordable coupled with disbursal of 7th pay commission salary increase and upswing in overall economic scenario. However due to demonetization of high currency notes on 8th Nov 2016, the demand in agricultural segments came down substantially and the overall economic scenario became subdued. Thus the company could achieve only 6% volume growth during the quarter.
Economic scenario has started improving since beginning of this quarter. Company expects normalcy beginning March. Resultantly, during the current year, company envisages volume growth between 8% to 10% over the corresponding period of previous year.
Company has signed MOU for supply of 250000 composite LPG cylinders and received initial order for 30000 pcs from customer in Bangladesh. Supplies for the same shall begin in Feb and expected to get fully executed by Mar 2017.
The company has offered additional credit days during the quarter to capture business with its channel partners to the extent possible resulting in higher working capital deployment. Consequently, company envisages reduction in its average monthly borrowings by around Rs 50 crore instead of Rs 100 crore, as expected earlier, for the year after meeting its capex and working capital requirements.
Company's capex and expansion plans are progressing smoothly. Company is in discussion phase with a State Government in South to finalize its project plan to establish a green filed plastic product manufacturing complex in the year 2017-18.
Raw material prices except Styrenics remained stable in a range bound manner. Company's requirement of Styrenics polymer ie, ABS and PS are quite low. Due to subdued economic scenario, the overall volume growth in polymer consumption in the country was around 5.3% in this quarter.
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