Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  

| More

Supreme Industries - Beat on all counts - ICICI Securities

Posted On: 2020-10-29 05:45:55

Supreme Industries (SIL) reported strong beat on all counts: a) impressive (8% YoY growth) sales recovery; b) 18.6% EBITDA margin (+500bps YoY) driven by inventory gains in plastic pipe segment, superior product mix, cost optimisation and operating efficiencies; and c) 75.6% YoY growth in PBT at Rs2.01bn (I-Sec: Rs1.45bn) led by strong operational performance and lower interest costs. With the company sustaining its capex drive by way of setting up incremental greenfield plants and further expanding its reach by widening its distribution network, we expect SIL to gain sizeable market share in a post Covid environment in its plastic piping and packaging segments in particular. Maintain BUY.

- Valuation and outlook: Factoring-in the Q2FY21 performance, we increase our revenue and PAT estimates by 2.8% / 0.3% and 13.9% / 5% for FY21E / FY22E respectively. We now expect the company to report revenue and core PAT CAGRs of 7% and 17.7% respectively over FY20-FY22E. We maintain BUY on the stock with a revised SoTP-based target price of Rs1,690 (earlier: Rs1,640), valuing the core business at 35x FY22E earnings.

- Revenues grow 8.2% YoY to Rs13.8bn (I-Sec: Rs12.6bn): SIL reported 8.2% YoY growth in revenues to Rs13.8bn driven by 1.4% / 6.6% YoY increase in volumes / realisation respectively. With sharp recovery seen in Sep'20 across segments, the company reported YoY volume growth of -1.8% / 10.6% / 13.4% / 0.6% in plastic piping / packaging / industrial / consumer segments respectively. VAP revenues too increased 8.6% YoY. Management commentary remained optimistic with regards to Oct'20-TD volumes - which are higher across all segments. We expect SIL to report 7% revenue CAGR over FY20-FY22E driven by market share gains in plastic piping and SILPAULIN in particular.

- EBIDTA margin surprises positively at 18.6% (I-Sec: 16.2%): SIL reported a beat in EBITDA margin at 18.6% (I-Sec: 16.2%), up 500bps YoY and 750bps QoQ. The beat was driven mainly by inventory gains in plastic piping segment in particular, higher share of VAPs and cost control. Management expects inventory gains to reverse in Q4FY21 with PVC prices likely to start correcting post-Dec'20. Going forward, we expect SIL's overall EBITDA margin to improve structurally over the next 2-3 years driven by higher contribution from its plastic piping and packaging product segments, higher sales of VAPs and sustained cost control measures undertaken by the company.

- Core PBT up by a strong 75.6% YoY to Rs2bn (I-Sec: Rs1.5bn): Better than expected operational performance led to a beat in core PBT at Rs2bn (I-Sec: Rs1.5n). Core PAT was up 15% YoY to Rs1.5bn (I-Sec: Rs1.1bn) led by tax reversal in the base quarter. Going forward, we expect SIL to report core PAT CAGR of 17.7% over FY20-FY22E.

Shares of SUPREME INDUSTRIES LTD. was last trading in BSE at Rs.1470 as compared to the previous close of Rs. 1459.2. The total number of shares traded during the day was 1573 in over 478 trades.

The stock hit an intraday high of Rs. 1475.05 and intraday low of 1435.35. The net turnover during the day was Rs. 2299281.

Source: Equity Bulls

Click here to send ur comments or to

Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only., its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.

Other Headlines:

Auto Sector - Monthly Volume Round-up - Nov 20 - Reliance Securities

What do brokerages say on Burger King India Limited's IPO?

The Phoenix Mills - Potential fund infusion may usher in growth - ICICI Securities

Godrej Agrovet - Beneficiary of 60% increase in palm oil prices - ICICI Securities

Automobiles (wholesale) - Wholesale dispatches rise amidst modest retail trends - ICICI Securities

Oil & Gas - Sector Update - Dec 2020 - ICICI Direct

Phoenix Mills (Buy): Asset monetisation at favourable terms... - ICICI Direct

Aditya Makharia's views on November Auto Sales Number for November 2020 - HDFC Securities

Burger King India - IPO Review - ICICI Direct

Quant Pick - LIC Housing Finance - ICICI Direct

Tech Mahindra - Analyst Meet Update - ICICI Direct

Gladiator Stocks - Crompton Greaves Consumer Electricals - ICICI Direct

Derivatives Monthly Outlook - Nifty support at 12800 for ongoing momentum...

Quant Pick - Sun Pharmaceuticals - ICICI Direct

Monetary Policy - Expectation from YES Securities

Sector Update on Asset Management Companies - Subdued but improvement expected - HDFC Securities

Pre Monetary Policy View - Dec, 2020 - Lakshmi Iyer, President and CIO (Debt) & Head Products, Kotak Mutual Fund

Maintain REDUCE on Siemens - Smart recovery priced in - HDFC Securities

Banking Sector Credit Trends - Growth continues to moderate - HDFC Securities

Q2 FY21 GDP: Light at the end of the tunnel - YES Securities

Siemens - Q4 FY20 Result Update - YES Securities

Super action in Home Loans - SBIN, ICICIBC, AXSB, HDFC and LICHF gaining share - YES Securities

Polymer price tracker - Dec 1, 2020 - PVC prices continue to tread higher - ICICI Securities

Bajaj Finance - Company Update - Dec 2020 - ICICI Direct

Siemens Ltd - Healthy revival in orders and margins - ICICI Securities

Covid Recovery Pulse - Nov 30, 2020 - Festive positivity continues in auto retails, e-way bill generation improves...

Derivatives Weekly View (November 27): Momentum expected to continue in broader markets with Nifty support at 12800...

Derivatives Strategy - Positional Option - ICICI Direct

Preview on RBI Monetary Policy - December 2020 - Shanti Ekambaram, Group President - Consumer Banking, Kotak Mahindra Bank

10 things you should know about Burger King India Limited

Views of HDFC Securities and Acuité Ratings & Research on Q2FY21 GDP Numbers

Rollover Report for November 2020 - December 2020: Angel Broking

Initiating Coverage on Godrej Properties - The housing factory - HDFC Securities

Burger King IPO - Angel Broking

Rollover Analysis - Record foreign inflows pushes Nifty to 13k - YES Securities

Ceramic tiles industry - Market share gains sustain for top branded players - ICICI Securities

Gas sector - CGD: Competition to hit margins, volumes and lead to derating - ICICI Securities

Cement - Prices resilient in Q3; consensus upgrades to continue - ICICI Securities

Specialty chemicals - Price trend in Sep-20 - ICICI Securities

Timken India - Q2FY21 Company Update - ICICI Direct

Upgrade in target price of IDFC First Bank - Angel Broking

Laurus Labs stake acquisition in Richore Lifesciences - Angel Broking

Shares of Lakshmi Vilas Bank (LVB) suspended from trading - Angel Broking

Initiating Coverage on Sundram Fasteners - Fastening growth - HDFC Securities

Astral Poly Technik - Scalability to further improve with storage tanks foray - ICICI Securities

Vardhman Special Steel - Q2FY21 Company Update - ICICI Direct

Initiating Coverage - Advanced Enzyme Technologies - ICICI Direct

L&T - Secures Large Contract - Nov 25, 2020 - Angel Broking

Alembic Pharmaceuticals - Tentative Approval for JV - Angel Broking

Drug launch by Lupin - Tacrolimus Capsules - Angel Broking

Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2019