Buy Supreme Petrochemical; target of Rs 482: KR Choksey

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26 Aug, 2025 12:21

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Supreme Petrochem Ltd. (SPL) has reported a revenue of INR 12,251 Mn in Q1FY24 against INR 14,854 Mn in Q1FY23, a de-growth of 17.5% on a YoY basis and INR 13,869 Mn in Q4FY23, a dip of approximately -11.7% on a QoQ basis. EBITDA in Q1FY24 stood at INR 905 Mn (-64.0% YoY / -56.7% QoQ), EBITDA Margin contracted by 956 bps YoY and 768 bps QoQ to 7.4% in Q1FY24 due to a correction in raw material prices resulting into a volume de-growth led by inventory destocking in the industry. Net Profit in Q1FY24 stood at INR 693 Mn (-63.4 YoY /-56.7% QoQ) , with NPM at 5.7% as compared to 11.5% in the quarter gone by. EPS during the quarter came at INR 3.68 against INR 10.06 in the same quarter last year and INR 8.50 in Q3FY23.

SPL reported a weak operating performance during Q1FY24 on the back of correction in styrene monomer prices resulting into a weaker industry demand due to inventory destocking. At CMP of INR 443, the stock is currently trading at a P/E multiple of 16.7x/11.0x on its FY24E/25E revised EPS of INR 26.5/40.2 respectively. We value the stock at 12x on its FY25E EPS of INR 40.2, which yields a target price of INR 482/share, an upside of 8.9% over the CMP. Accordingly, we changed our rating from “BUY” to “ACCUMULATE” rating on the shares of Supreme Petrochem Ltd.

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