Shares of Supreme Industries surged over 4 percent to Rs 6,264 per share on July 10 after global brokerage firm Jefferies shared a 'Buy' call and raised target price to Rs 6,700 apiece, indicating an upside of 7 percent from current levels. The upgrade came after volumes grew 22 percent on-year during April-May period despite a high base.
So far this year, the stock of the plastic pipes manufacturer has surged over 37 percent, beating a 12 percent rise on the benchmark Nifty 50 index. Earlier, Supreme Industries had hit 52-week high of Rs 6,482 per share on June 12, 2024.
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Analysts at Jefferies, in a recent note, said that Supreme Industries' is a good play on housing, capex, and agriculture and they estimate 25 percent earnings per share (EPS) compounded annual growth rate (CAGR) over FY24-27.
"Sales grew by 12 percent YoY impacted by PVC volatility. The focus is on value-added sales that can aid margin. SKU breadth and distribution depth act will act as key moats for share gains," the brokerage firm added.
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In its recently concluded AGM, Supreme Industries shared highlights for the first two months of FY25, and update on its ongoing and future expansion plans. The management retained its overall volume growth guidance of 20 percent YoY for FY25 and added 3 new greenfield site expansions to its existing expansion plan.
The company saw growth momentum continuing in first two months of FY25 (sales including other income were up 11.9 percent YoY led by 22 percent YoY volume growth aided by 25 percent YoY growth in plastic pipe systems, and value-added products grew 19.8 percent YoY.
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