Continue to remain positive on Supreme Inds: Nirmal Bang

The company operates in a highly fragmented market with intense competition from unorganized and small players who constitute almost 70% of the market. However, due to its superior quality, range and service, SIL's products are widely accepted in industries it operates in. SIL offers a wide and comprehensive range of products across the Indian market through its well networked distributors and 19 manufacturing plants.

Apart from plastics, the company also has interests in the construction business. Its maiden commercial project 'Supreme Chambers' - a 10-storeyed building with saleable area of 2,75,000 sq ft at Andheri (West), Mumbai - is ready for occupation. The company has sold around 40,000 sq ft and expects to sell the remaining portion by the end of calendar year 2012.

SIL is a dominant player in the Indian plastics industry, with more than 7,000 industrial as well as consumer products. The company offers a wide range of plastic products with a variety of applications in moulded furniture, storage and material handling products, XF films and products, performance films, industrial moulded products, protective packaging products, plastic piping system as well as petrochemicals.

Consistent financial performance

SIL's revenues have consistently grown at a CAGR of 22% during 2008-2012. Profits in the same period have grown at a CAGR of 47%. The company's ROE has also been consistently above 30% for the past several years.

Moreover, the company has generously distributed a part of its profits to investors by maintaining a payout ratio above 30% in the past several years. For FY12, the dividend yield stood at 2.7%.

Conclusion

SIL continues to enjoy leadership in the plastic products market and plans to expand capacity. It is adding many new products to achieve the same in the coming years. All this should augur well for SIL, going forward and we continue to remain positive about the prospects of the company.

Source: Nirmal Bang's Beyond Market

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