Sharekhan's research report on Supreme Industries
The company reported better than expected revenue growth for Q2FY2022 led by high realizations and healthy volume growth in plastic products. OPM came in below than expected on account of higher raw material costs. The company remain optimistic on the underlying demand and target to achieve 3-4 y-o-y volume growth for FY2022. Expect PVC prices to remain firm over next six months. Capex of Rs. 521 crores for FY2022 remains on track with new plants expected to be operational between January 2022 to May 2022. We expect infra, housing and government schemes to provide a long term sustainable demand environment.
Outlook
We retain a Buy on Supreme Industries Limited (SIL) with a revised PT of Rs. 2,721, factoring in upwardly revised estimates for FY2022-FY2024.
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