Supreme Industries Q2 Review: IDBI Capital Maintains 'Hold' Post Inline Result, Trims Target Price— Here's Why

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IDBI Capital Report

Supreme Industries Ltd.’s Q2 FY26 result was in-line with our estimates on key parameters. Despite healthy volume growth, the company reported muted net sales growth as lower polymer prices dented net sales realisation.

On a positive note, the management sounded optimistic about demand for the plastic piping system in the agriculture segment in the second half of FY26.

Robust demand is also anticipated on the plumbing side in H2. Supreme Industries reported net sales of Rs 23.9 billion, marginally up by 5.3% YoY, while Ebitda came in at Rs 2.9 billion, declined by 6.8% over Q2 FY25. It reported net profit of Rs 1.6 billion, lower by 20.3% YoY.

The management as further lowered their sales volume guidance to 12-14% YoY. Given pessimistic management commentary on demand, we have cut net sales/PAT estimates by 6%/8% and 4%/6% respectively over FY26E/FY27E.

Maintain Hold with a revised target price of Rs 4,146 (earlier Rs 4,395), assigning 40x PER on FY27E.

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