Cholamandalam securities' research report on Supreme Industries
Supreme Industries (SIL) reported a mixed performance for 4QFY22 as revenue grew by 22.7% YoY led by higher volumes & better realizations, while EBITDA & PAT lowered by 23.2% & 28.1% respectively. The overall volume grew by 15.6%/40.8% QoQ, majorly driven by recovery in plastic piping segment (27% YoY/68.7% QoQ). EBITDA margin came at 15.3% (-900bpsYoY/-100bps QoQ) amidst elevated RM inflation. APAT stood at ₹3.2bn (-28.1%YoY/+31.8%QoQ). The management remains highly optimistic about the demand environment for FY23 aptly reflected by traction observed in volumes.
Outlook
At CMP the stock is trading at 26.6x & 23.6x its FY23E/FY24E EPS; we are valuing SIL on a SOTP basis to arrive at a target price of ₹2,240 (earlier ₹2,703) while maintaining BUY rating on the stock.
For all recommendations report, click here
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