Sharekhan's research report on Supreme Industries
Q2FY2025 earnings performance lagged estimates led by sharp volatility in PVC prices, weak infrastructure demand and extended monsoons. However, adjusted OPMs beat estimates. The management lowered overall volume growth guidance to 14-15% y-o-y and plastic piping volume growth to 16-18% y-o-y for FY2025. Consolidated OPM guidance marginally lowered to 14.5-15.25%. Stabilisation of PVC prices at lower levels, expected pick-up in infrastructure, housing and agriculture demand is expected to result in strong H2 performance.
Outlook
We retain a Buy on Supreme Industries Limited (SIL) with a revised PT of Rs. 5,700, lowering our valuation multiple. Stock price correction of over 15% in past few days provide buying opportunity.
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