Supreme Industries reported 54% drop in net profit to Rs 104.09 crore despite an 8% increase in revenue from operations to Rs 2,086.58 crore in Q2 FY23 over Q2 FY22.
Raw material costs rose by 21% to Rs 1,602.14 crore in the second quarter as compared with Rs 1,320.72 crore in the same period last year.
EBITDA declined by 53% to Rs 147.25 crore in Q2 FY23 from Rs 310.95 crore in Q2 FY22. EBITDA margin was 7% in Q2 FY23 as against 16% in Q2 FY22.
Profit before tax in Q2 FY23 stood at Rs 127.23 crore, down by 57% from Rs 293.4 crore in Q2 FY22.
The board of directors has declared interim dividend of Rs 6 per share for the financial year 2022-23. The record date for the same is 9 November 2022.
The company has total cash surplus of Rs 493 crore as on 30 September 2022 as against cash surplus of Rs 518 crore as on 31 March 2022.
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M. P. Taparia, managing director, Supreme Industries, said: Plastics Pipe System business profit was severely affected due to continued fall in PVC resin prices in second quarter, which started with effect from April itself. The Company is supplying piping system from different Polymeric materials also, other than PVC, which overall resulted in positive outcome in this segment, in spite of severe fall in PVC prices.
The company is fully geared to cater to increased demand of it's product with increased available capacity by Greenfield projects at three locations starting from July and shall be operational fully by December this year and also brown field expansion of capacities at other locations. The company expects to achieve 25% plus volume growth in this segment for the year compared to last year business.
The company's capex plan for the year 2022-23 of about Rs 700 crore, including carry forward commitment of Rs 280 crore is progressing with a little delay from the envisaged schedule. Entire capex shall be funded from internal accruals.
The prices of different Polymers particularly for polypropylene (PP), low denier polyethylene (LDPE) and poly vinyl chloride (PVC) have gone down between Rs 31 per kg to Rs 55 per kg since beginning of the year till now i.e. a reduction between 21% to 38%. Your company is large consumer of PVC Resin which has witnessed the highest fall since April 2022.
This sharp reduction has resulted in inventory losses but would make products more affordable. Company expects business conditions to improve during second half of the year and remains optimistic in various business segments where it operates.
Supreme Industries is India's leading processor of plastic. The company has a diverse product portfolio, comprising piping systems, cross laminated films and products, protective packaging products, industrial moulded components, moulded furniture, storage and material handling products, performance packaging films and composite, and liquefied petroleum gas cylinders. It has 25 facilities across India.
The scrip jumped 6.17% to currently trade at Rs 2161.15 on the BSE.
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