KRChoksey's research report on Supreme Petrochemicals
For 1QFY21, Supreme Petrochem’s (SPL) revenue from operations decreased by 62.1% YoY (- 55.9+% QoQ) to INR 29,227 lakhs. Gross Profit Margin contracted 391bps/322bps YoY/QoQ to 11.7% in 1QFY21 from 15.6% in 1QFY20 & 14.9% in 4QFY20. EBITDA turned negative for the quarter and stood at INR 319 Lakhs vs INR 5,934 Lakhs in 1QFY20 & INR 3,918 Lakhs in 4QFY20. Company reported a Net Loss of INR 1,188 Lakhs, compared to Net Profit of INR 3,947 Lakhs in 1QFY20 & INR 2,351 Lakhs in 4QFY20.
Hence, we apply a higher P/E multiple of 17.5x (earlier 17.0x) on FY22E estimated EPS of INR 12.1/share and raise our target price to INR 212/share, an upside of 16.3% over the CMP. Accordingly, we reiterate a “BUY” rating on the shares of Supreme Petrochem Ltd.
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