Supreme Industries Shares Gain After Analysts Raise Target Price
The company's third-quarter revenue rose 19% year-on-year to Rs 2,310.7 crore, while net profit declined 15% to Rs 210 crore.
Shares of Supreme Industries Ltd. gained after most analysts raised the target price for the stock after its third-quarter earnings.
"Supreme reported strong Q3 results with revenue up 19% YoY. Despite an inventory loss, its Ebitda margin rose to 13.1%, and volume increased 51% YoY on a low base," CLSA said in its investor note.
Supreme Industries Q3 Earnings ( Consolidated, YoY)
Revenues gained 19% to Rs 2,310.7 crore.
Net profit declined 15% to Rs 210 crore.
Ebitda stood at Rs 303.4 crore versus Rs 317.9 crore.
Ebitda margin stood at 13.1% versus 16.3%.
Shares of the company ended 0.51% higher, compared with a 1.25% decline in the NSE Nifty 50 Index. The relative strength index stood at 50.
Of the 28 analysts tracking the stock, 21 maintained a 'buy', five kept a 'hold', and two recommended a 'sell', according to Bloomberg data. The stock's return potential is 6.9% over the next 12 months.
Here's what analysts made of the results:
Retains 'buy' and raises price target to Rs 3,060 from Rs 2,920 earlier, implying a potential upside of 30%.
Views company as a holistic play on revival in housing, capex, infrastructure, and agri demand, led by diversified product mix and entrenched reach.
Expects FY23-25 earnings per share CAGR at 25%.
Says Supreme Industries is a high-conviction, small and medium cap pick for the brokerage.
Pegs demand slowdown and sharp PVC volatility as key risks.
Forecasts sales at Rs 9,500 crore, operating margins at 11.7% and volume growth at 26% for the current fiscal.
Estimates sales, profit after tax to post a compound annual growth rate of 14% and 26% respectively, driven by new capex, housing and capex, government schemes and new launches.
Maintains 'outperform' rating on the stock and raises price target to Rs 2,670 from Rs 2,100.
Says capacity expansion and stable PVC prices augur well for the company's medium-term outlook.
Cuts FY23 Ebitda 4%, but raises FY24-25 Ebitda 13%-14% to factor-in its recent results.
Overall capacity is to rise by 90kt to 815kt by March. With 500kt in sales in FY23, it provides a long runway for growth.
The new capacity could reach 65% utilisation in 12–14 months.
Full-year capex is likely to be Rs 400–500 crore.
Retains 'buy' on stock and raises target price to Rs 2,900 per share from Rs 2,550 apiece.
Says incremental capex to yield attractive return ratios, which is a positive.
The third quarter stands out optically due to gains on low base and channel re-stocking on recent resin up-move.
Supreme's pan-India manufacturing reach, wide product basket and scale benefits are positives.
Company's strong cash flow conversion, incremental growth capex and strong bull/sell position are noteworthy.