Strong rural demand cushions volume weakness for Supreme Industries

Expanding distribution reach, value added products to help revenues, margins

The stock of India’s largest plastic pipes company Supreme Industries is up 17 per cent since the lows in August on hopes that demand from the rural segment, higher realisations and market share gains will support its revenue growth.

Weak volume growth due to falling demand from construction and plumbing segments had dented the financial performance of pipe companies in the June quarter; Supreme Industries reported a 27 per cent dip in revenues on the back of a 19 per cent drop in volumes.

While the company operates in four segments including packaging, consumer and industrial, plastic piping is the mainstay accounting