Supreme Industries sinks 10% on de-growth in revenue, profits; details

Supreme Industries shares tanked up to 10 per cent at Rs 4,479.65 per share on the BSE after the company delivered muted quarterly earnings for the second quarter of the financial year 2024-25 (Q2FY25).

In Q2FY25, the company reported a revenue de-growth of 1.55 per cent year-on-year, reaching Rs 2,272 crore, down from Rs 2308 crore in Q2FY24. Sequentially revenue fell by 13.4 per cent. 

Profit After Tax (PAT) decreased by 15 per cent, reaching Rs 219 crore in Q2FY25 from Rs 259 crore in the same quarter last year.

Earnings before interest, taxes, depreciation, and amortisation (Ebitda) drooped by 10.4 per cent year-on-year to Rs 319 crore in Q2FY25 from Rs 356 crore in the same quarter last year. Ebitda margins dropped to 14.05 per cent versus 15.44 per cent in Q2FY24. 

 

The company informed that it continues to be debt free and has cash surplus of Rs. 674 crores as of 30 September 2024. 

The Board of Directors of the company have declared an interim dividend of Rs 10 per share of Rs. 2 each, for the financial year 2024-25. The Dividend will be paid to those shareholders whose names stand on the register of members as on the record date i.e 30th October 2024. 

MP Taparia, managing director, Supreme Industries said that the plastic pipe systems business growth was severely affected due to extreme volatility in PVC resin prices, low spending on infrastructure in the first six months by Governments and extended monsoon. 

He further said that due to the Red sea shipment movement blockade, the container productivity went down extremely. It led to a steep freight increase from Asian countries to India. 66 per cent demand of PVC resin in India is met from imports. Out of that volume, more than 80 per cent of import is coming from Asian countries. 

This type of price volatility in a very short period led to deep destocking in the entire trade channel. As the rainy season got extended, the demand revival for Agricultural pipe also remained subdued in the month September. Thus, the company has revised its guideline of 25 per cent volume growth in plastic pipe system to be between 16 to 18 per cent for this year, Taparia said. 

“Looking at the business outlook and opportunities, the company has made capex commitments including carry forward commitments of around Rs. 1500 Crs. Total cash outflow during the current year is not likely to exceed Rs. 1000 crore and shall be funded entirely from internal accruals,” said Taparia. 

At 02:29 PM, the stock price of the company slumped 9.64 per cent at Rs 4,498.15 a piece on the BSE. By comparison, the BSE’s Sensex was down 0.72 per cent to 80,567 level.

Supreme Industries specialises in producing plastic products across categories such as piping systems, cross-laminated films, protective packaging, molded components, molded furniture, storage solutions, performance packaging films, and composite LPG cylinders