Supreme Industries Limited Q2 FY25
Performance Summary
#### 1. *Volume Growth*
- *Q2 FY25 Volume: 138,077 MT of plastic goods sold, reflecting a marginal **volume growth of 0.23%* YoY compared to Q2 FY24.
- *H1 FY25 Volume: 311,912 MT sold, showing a strong **YoY growth of 8.94%* compared to H1 FY24.
#### 2. *Sales Growth*
- *Q2 FY25 Sales: Revenue from operations stood at ₹2,273 crore, a **decline of 1.56% YoY* compared to ₹2,308 crore in Q2 FY24.
- *H1 FY25 Sales: Revenue increased to ₹4,909 crore, a **YoY growth of 4.96%*.
#### 3. *Profit Growth*
- *Q2 FY25 PAT: Profit after tax (PAT) decreased by **15.61% YoY* to ₹219.39 crore compared to ₹259.97 crore in Q2 FY24.
- *H1 FY25 PAT: ₹455.53 crore, a slight **0.26% YoY growth*.
#### 4. *Profit Margins*
- *Q2 FY25 EBITDA Margin*: 14.05%, down from 15.44% in Q2 FY24.
- *H1 FY25 EBITDA Margin*: 14.40%, compared to 14.50% in H1 FY24.
#### 5. *Profitability Ratios*
- *Return on Equity (RoE)*: Based on H1 FY25 results, the company's profitability remains healthy, although marginally lower due to reduced YoY profit growth.
- *EBIT Margin*: Q2 FY25 EBIT margin dropped to 10.09% from 12.32% YoY.
#### 6. *Leverage Ratios*
- Supreme Industries continues to operate with *no debt*, maintaining a cash surplus of ₹674 crore as of September 30, 2024.
#### 7. *Valuations*
- *Earnings per Share (EPS)* for Q2 FY25 is ₹17.27, down from ₹20.47 in Q2 FY24. The company’s trailing twelve-month (TTM) EPS suggests that valuations may have softened due to reduced profit margins.
#### 8. *Company Overview*
Supreme Industries is one of India's largest plastic manufacturing companies with operations across eight business verticals and 30 manufacturing plants. The company caters to multiple sectors including piping, industrial components, and packaging products.
#### 9. *Industry Overview*
The Indian plastics industry is witnessing robust growth, driven by increasing demand from infrastructure projects, industrial applications, and consumer goods. The government's focus on infrastructure development and housing augments demand for plastic piping and related products.
#### 10. *Peer Comparison*
Supreme Industries faces competition from key players like Astral Poly Technik, Finolex Industries, and Prince Pipes in the piping and plastic goods sectors. Its peers have also shown mixed results amid cost pressures from raw material inflation.
#### 11. *Future Outlook*
- *Near-Term*: Given the company's volume growth, its cost-saving measures, and a diversified product portfolio, Supreme Industries is expected to maintain stable operational performance. However, margin pressures due to high raw material costs might persist in the near term.
- *Long-Term*: The company's focus on expanding its capacity, especially in the plastics and piping segments, combined with sustainability initiatives (like reducing carbon emissions and increasing renewable energy usage), should drive growth over the long term. The debt-free status and strong liquidity position provide a buffer against market volatility.
#### 12. *Conclusion for Investors*
- Supreme Industries has shown resilience in maintaining volume growth, despite margin pressures in the current quarter. With stable financials, a debt-free balance sheet, and long-term growth initiatives, the company remains an attractive investment for those looking at steady long-term returns, although near-term challenges in profitability and margins may persist.
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