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Yes Securities Report
Supreme Industries Ltd. reported decent volume growth of 9% YoY and 3% QoQ (two‐ year volume compound annual growth rate 9%) wherein pipe division (71% of volumes) registered 9% YoY growth and remained flattish as compared to Q1 FY23.
During the quarter, plastic pipe's margins contracted sharply from 15%/11% in Q2 FY22/Q1 FY23 to 2% in Q2 FY23 owing to steep fall in poly vinyl chloride prices, which degrew by Rs 55/kilo gram in Q2 FY23 (PVC contributes ~80% of pipe biz).
Other segments registered steady performance in terms of topline and margins.
Supreme Industries expects strong demand from plumbing and agricultural segment in H2 FY23 and hence company has guided for 20% YoY volume growth in FY23 wherein pipe division should grow by 25%.
Additionally, with polymer prices likely to bottom‐ out, management believes margins to come in at 12‐12.5% for FY23.
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