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Last Updated : Sep 23, 2020 12:15 PM IST | Source: Moneycontrol.com

Buy Supreme Industries: target of Rs 1640: ICICI Securities

ICICI Securities is bullish on Supreme Industries recommended buy rating on the stock with a target price of Rs 1640 in its research report dated September 23, 2020.

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ICICI Securities research report on Supreme Industries


We upgrade Supreme Industries (SIL) to BUY driven by a) faster-than-expected recovery post Covid-19 led lockdown - mere 3.4%/3.7% volume/value decline in Jul and Aug’20 (Source: Chairman’s speech at its recently concluded AGM); b) higher (double-digit) growth expectations post FY21 in its core segments – plastic piping and SILAPULIN; c) likely improvement in asset turns over the next 2-3 years with huge capex over FY20-FY21 going into the production next year; d) reducing dependence on commodity-led industrial and consumer product segments; d) higher EBITDA margin trajectory driven by increasing share of VAP revenues, further decentralisation of plants, superior product mix and operating leverage; and f) fast improving RoCEs led by strong traction in profitability and higher fixed asset turns.


Outlook


We upgrade SI to BUY with a target price of Rs1,640 (Rs1,135 earlier) valuing it at 35x FY22E core earnings.


For all recommendations report, click here


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First Published on Sep 23, 2020 12:15 pm
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