Supreme Industries’ revenue for the fourth quarter was Rs 30 billion, showing a small increase of just 0.6% compared to last year. The volume of products sold grew by only 2.3%. However, their profits were affected by uncertain pricing of PVC (a type of plastic), leading to slower inventory filling and some fixed costs not being fully covered. As a result, their profit margins decreased: gross margin fell by 3.1%, EBITDA margin by 2.6%, and net profit margin by 2.1%.
Looking ahead, the company plans to invest aggressively, with a capital expenditure of Rs 11 billion. This will be used for expanding existing operations and acquiring Wavin, a company that will enhance their product range. Management aims for a 10-12% growth in product volume in FY26, which would lead to Rs 120 billion in revenue, and expects operating margins to improve to 14.5-15.5%.
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At the current market price, the stock is trading at 40 times the estimated earnings for FY26 and 31.7 times for FY27. Anand Rathi maintains a “Buy” rating on the stock with a target price of Rs 4,386, down from Rs 6,458 earlier. This target is based on 40 times the estimated earnings for FY27.
