Supreme Industries Faces Trading Muted after Q3 Shortfall and Inventory Losses

Supreme Industries Faces Trading Muted after Q3 Shortfall and Inventory Losses

VoM News Desk | January 20, 2024 | 12:40 PM IST | Breaking News | Follow on Google News

Supreme Industries Faces Trading Muted after Q3 Shortfall and Inventory Losses/Pixabay

Supreme Industries Faces Trading Muted after Q3 Shortfall and Inventory Losses

Supreme Industries’ share price remained subdued in Saturday’s trading session, impacted by a shortfall in EBITDA/PAT projections for the quarter ending December. The company attributed this performance to inventory losses due to a decline in PVC prices, as reported by brokerages. Despite witnessing a 17% growth in the pipes sector volume during Q3FY24, the company fell short of the estimated 20%.

Rajesh Bhosale, Equity Technical and Derivative Analyst at Angel One, noted a recent strong price correction and suggested a potential bounce if prices close around 4120–4130. However, given the below-estimate results, the brokerage Nuvama Institutional Equities revised EPS downwards by 4% across FY24E/25E/26E, maintaining a “Buy” stance with a target price of ₹4,764.

Similarly, Antique Stock Broking acknowledged Supreme Industries’ solid operational performance in 3QFY24, with a 14% YoY growth in volume. However, lower profitability in the pipe segment led to a shortfall in projections. The brokerage maintained a “HOLD” rating with a revised target price of ₹4,690.

In the third quarter, Supreme Industries reported a consolidated net profit of ₹256.17 crore, marking a 22% increase from the previous year. The overall revenue from operations for the same period increased by 6% to ₹2,449.10 crore. Despite these figures, expenses rose by 3.82%, leading to a cautious market sentiment.

M. P. Taparia, Managing Director of Supreme Industries, remains optimistic about business opportunities, committing to further Capex in alignment with growth plans. Total commitments, including the acquisition of Parvati Agro Plast, may exceed ₹1,000 crores, but the cash outflow is not expected to exceed ₹750 crores for the year, entirely funded from internal accruals.

VoM News Desk

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