The plastic pipe business underperformed in FY25 due to subdued infrastructure spending by governments, erratic rainfall, and extreme volatility in PVC resin prices, which changed 14 times post-Jul'24. Despite these challenges, Supreme Industries delivered ~6% volume growth in its Plastic Pipe business in FY25, outperforming the ~6% degrowth in overall industry volumes. The industry size stood at 4.29 million metric tonne in FY25.
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Dolat Capital Report
Supreme Industries Ltd.'s Q4 FY25 performance was mixed with volume/revenue/Ebitda below our estimates. However, Ebitda margins were in-line and adjusted profit after tax exceeded expectations.
For FY26/FY27E, we expect overall volume growth of ~12%/~10% and piping volume growth of 13%/10%.
We have reduced our FY26/FY27E EPS estimates by 4.3%/4.4% following a 4.7% reduction in our volume forecasts for both years.
Maintain ‘Accumulate' rating with a revised target price of Rs 3,927 based on 38 times consolidated FY27E EPS versus 37x (1-year Fwd) five year averages.
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