Hold Supreme Industries: target of Rs 3800: ICICI Securities

Hold

ICICI Securities's research report on Supreme Industries

Supreme Industries (SI) reported Q2FY26 blended plastics volume growth of 11.8% YoY with pipes segment reporting 17.2% YoY volume growth (6-year CAGR of 10%), partly aided by Wavin acquisition. Blended EBIT/kg dipped 24.3% YoY to INR 13 (+1.6% QoQ) as pipes EBIT/kg fell 28.1% YoY to INR 10.6 (flat QoQ). Management cut guidance for blended volume growth at 12-14% (from 14-16% earlier) with piping segment growth of 15-17% (unchanged), and consol. OPM of 14.5–15.5% for FY26.

Outlook

We cut FY26/27E PAT by ~11.7%/1.3% and believe SI’s near-term profitability may remain tepid due to weak demand and increased competition. Maintain HOLD on full valuation with a rolled-over Sept’26E SoTP-based revised TP of INR 3,800, set at an unchanged core business target P/E of 35x.

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