(CMP : Rs. 2104; MCap Rs. 26726 crore)
Supreme Industries' Q1FY22 performance came in below our estimates due to lower volume offtake of piping business which was impacted by covid-19 related lockdowns and higher input prices.
Q1FY22 Earnings Summary
- Supreme Industries' revenue growth at 27% YoY to Rs. 1342 crore was lower than our estimate of Rs. 1527 crore, mainly due to sharp decline in the volume offtake of piping business. Despite a lower base, piping segment volume was down by 36% YoY mainly due to covid-19 related lockdown which impacted the agri pipe demands. However, packaging, industrial and consumer product segments volume growth at 13%, 99%, ~40% YoY have restricted overall volume decline at 22% YoY in Q1FY22
- The EBITDA margin came in higher by 543 bps YoY at 16.5% in Q1FY22. However, the same was below our estimate of 19%, mainly due to high input prices and lower profitability in the consumer and packaging product segments
- PAT at Rs. 170 crore was higher by ~4x as compared to Q1FY21 mainly due to a favourable base and sharp increase in the profit from associates (from loss of Rs. 4 crore to profit of Rs. ~45 crore)
We believe, Supreme Industries performance in Q1FY21 was disrupted due to second wave of Covid 19 which was wide spread in rural areas. As, April & May are the peak season for PVC pipes system for agriculture, the lockdown in the month of May had impacted the sales volume of the said business. We await management commentary on future recovery of piping business and raw material prices movement post opening up of the economy. We would be revisiting our estimates and target price post the conference call.
Shares of SUPREME INDUSTRIES LTD. was last trading in BSE at Rs. 2104 as compared to the previous close of Rs. 2109.7. The total number of shares traded during the day was 5536 in over 1698 trades.
The stock hit an intraday high of Rs. 2127 and intraday low of 2078. The net turnover during the day was Rs. 11603068.