PL First Cut – Supreme Industries Ltd Q2FY24 Result

*PL First Cut – Praveen Sahay – Research Analyst, Prabhudas Lilladher Pvt Ltd*

Supreme Industries Ltd.

CMP: Rs 4165| Mcap: Rs529bn | Accumulate

➡️ Revenues increased by 6.0% YoY to Rs24.4bn (PLe: Rs24.4bn,in line with our estimates) vs 5.3% below cons. est.: Rs25.8bn. overall volume increased by 14.2% YoY to 158kMT (vs Finolex down 10% YoY) and realization decline by 6.4% YoY.

➡️ Gross margins expanded by 420bps YoY to 33.0%. (PLe: 31%)

➡️ EBITDA grew by 25% YoY to R3.8bn (PLe: Rs3.4bn, 13% above) vs 1.5% below cons. est.: Rs3.8bn. EBITDA margins expanded by 240bps YoY to 15.5% (PLe: 13.7% & Cons. est 14.9%)

➡️ EBITDA per Kg increased by 9% YoY to Rs 24/Kg (vs Finolex of Rs9.9/Kg for P&F segment)

➡️ PBT grew by 29% YoY to Rs3.2bn (PLe: Rs2.7bn, 15.3% below) vs 3% above cons. est.: Rs3.0bn

➡️ PAT grew by 29% YoY to Rs2.56bn (PLe: Rs2.3bn, 11.5% above) vs 1% below cons. est.: Rs2.6bn

➡️ Plastic Pipe segment reported a revenue of Rs16.4bn up 9% YoY. EBIT stood at Rs2.4bn up 22% YoY with a margin of 15%. Vol. up 17.2% YoY.

➡️ Packaging Product segment reported a revenue of Rs3.5bn up 3% YoY. EBIT stood at Rs590mn up 69% YoY with a margin of 16.6%. Vol. up 3.1% YoY.

➡️Industrial Product segment reported a revenue of Rs3.3bn down 1% YoY. EBIT stood at Rs42mn down 6% YoY with a margin of 12.7%. Vol. up 9.8% YoY.

➡️Consumer Product segment reported a revenue of Rs1.12bn down 3.2% YoY. EBIT stood at Rs230mn down 2.4% YoY with a margin of 20.9%. Vol. down 2.6% YoY

➡️The overall turnover of value-added products remains at Rs.8.5bn in Q3FY24 as compared to Rs8.3bn in Q3FY23.

The stock is currently trading at 39x/32x FY25/FY26 earnings.