Add Supreme Industries, target price Rs 4,770: HDFC Securities
HDFC Securities has an add call on Supreme Industries with a target price of Rs 4,770. The current market price of the stock is Rs 4569.6. Supreme Industries, incorporated in 1942, is a midcap company with a market cap of Rs 58343.44 crore, operating in plastics sector.
Supreme Industries's key products/revenue segments include Plastic Products, Polymers (Traded), Other Operating Revenue, Processing Charges and Export Incentives for the year ending 31-Mar-2024.
Financials For the quarter ended 30-09-2024, the company has reported a consolidated total income of Rs 2,288 crore, down -13.91% from last quarter's total income of Rs 2657.79 crore and down -1.44% from last year same quarter 's total income of Rs 2321.38 crore. The company has reported net profit after tax of Rs 178.79 crore in the latest quarter.
Investment Rationale
Supreme Industries management expects 14-15% consolidated volume growth in FY25. The company lowered their pipes volume growth guidance to 16-18% YoY for FY25 vs 25% guided earlier. SIL plans to increase capacity by ~30% in FY25 and FY26 to 1.25mn MT (pipes capacity 1mn MT). Considering weak Q2 volume, HDFC Securities has cut volume estimates by 3% each for FY25-27E and downgraded APAT estimate by 4/3/3% for FY25/26/27E.
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