Prabhudas Lilladher's research report on Supreme Industries
Supreme Industries (SI) delivered healthy volume growth of 14.2% ahead of expectations, mainly led by Plastic pipe segment (up 17.2% YoY on higher base) and increase in EBITDA/kg to ~Rs 24/kg (up 9.3% YoY). SI maintained its overall volume growth guidance to 23%+ (increased for pipe segment from 28% to 30%) and increased EBITDA margin to 15.5% from 14.5% for FY24. We continue to maintain our positive view given 1) capacity expansion in different geographies, 2) new product development, 3) wide pan India distributors, and 4) cash surplus of Rs5.9bn for funding expansion plans. We estimate Revenue/EBITDA/PAT CAGR of 13.7%/22.6%/21.4% for FY23-26E with volume CAGR of 16.7% and EBITDA margin improvement of 330bps.
Outlook
We tweak our FY25/FY26 earnings estimates and revise the TP to Rs 4823 (Rs 4848 earlier), based on 40x Dec’25 EPS plus 25% discount to Supreme Petrochem’s stake.
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