Supreme Industries share price surges over 8% buoyed by Q4 result; is the stock buy-worthy? Here's what experts say

Supreme Industries stock terms opened astatine ₹4,430.55 against its erstwhile adjacent of ₹4402.30 and roseate implicit 8 per cent to deed the day's precocious of ₹4,758.85 successful Monday's commercialized truthful far. Around 11:30 am, Supreme Industries stock terms traded 7.88 per cent higher astatine ₹4,749 apiece. Equity benchmark Sensex was 0.77 per cent up astatine 74,298 astatine that time.

Till April 26 close, Supreme Industries stock terms stock terms has surged implicit 64 per cent implicit the past year. In comparison, equity benchmark Sensex has gained somewhat implicit 22 per cent successful the aforesaid period.

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Supreme Industries Q4 result

Supreme Industries, during marketplace hours connected Friday, April 26, reported a 38.51 per cent quarter-on-quarter (QoQ) emergence but a 1.28 per cent year-on-year (YoY) autumn successful Q4FY24 consolidated nett net to ₹354.82 crore.

Total consolidated income successful Q4 roseate astir 22.52 per cent QoQ and 15.95 per cent YoY to ₹3,025.98 crore.

The operating nett of India’s starring plastics merchandise manufacturing institution roseate 0.37 per cent year-on-year.

"The institution has a full currency surplus of ₹1,178 crores arsenic connected March 31, 2024, arsenic against a currency surplus of ₹738 crores arsenic connected March 31, March 2023. The wide turnover of value-added products accrued to ₹3,737 crore arsenic compared to ₹3,329 crore successful the erstwhile twelvemonth achieving maturation of 13 per cent," said Supreme Industries.

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The institution announced it would wage a last dividend of ₹22 per stock of just worth of ₹2 each for FY24.

The banal ended 2.34 per cent higher connected Friday aft the Q4 effect announcement.

Buy-worthy stock?

Several brokerage firms expressed affirmative views astir the banal aft Supreme Industries' March 4th earnings. Some of them person upgraded their ratings connected the banal and revised their people prices upward.

YES Securities has upgraded the Supreme Industries banal to a 'neutral' from a 'reduce', pegging the people terms astatine ₹4,546 arsenic the brokerage steadfast believes the institution volition proceed to spot robust maturation supported by steadfast request from agri, infra and plumbing segments.

Moreover, YES Securities observed that the company’s absorption connected expanding marketplace stock via adding much SKUs (stock-keeping units), uncovering newer applications and expanding the organisation web are besides the cardinal positives.

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"We person factored tube measurement maturation of 17 per cent CAGR implicit FY24-FY26E and wide measurement maturation of 15 per cent CAGR implicit a akin period. We expect gross maturation of 16 per cent CAGR implicit FY24-FY26E with EBITDA margins of 15.5 per cent and 15.2 per cent successful FY25E and FY26E respectively," said YES Securities.

"We person valued the institution astatine P/E (price-to-earnings ratio) of 40 times (versus 35 times earlier) connected FY26E standalone EPS (earnings per share) of ₹108 (revised upwards by 3 per cent), arriving astatine a people terms of ₹4,546, including ₹220 per stock worth of Supreme Petrochem. Hence, we person upgraded the banal from 'reduce' to 'neutral'," said the brokerage firm.

Brokerage steadfast Sharekhan by BNP Paribas upgraded Supreme Industries to a 'buy' with a revised people terms of ₹5,200, factoring upwardly revised estimates connected a beardown request environment.

Sharekhan pointed retired that Supreme Industries expects beardown 25 per cent year-on-year measurement maturation successful integrative piping for FY25 owing to the stabilisation of PVC prices astatine little levels and sustained demand.

"Supreme Industries continues to payment from sustained agriculture and infrastructure request aided by stabilisation of PVC prices astatine little levels. It is expected to spot precocious maturation implicit the adjacent 2 years aided by steadfast request and rangebound question successful PVC prices," Sharekhan observed.

"Aggressive expansions, funded wholly done interior accruals, are expected to support its equilibrium expanse strong. A steadfast request outlook and incremental capableness additions volition apt thrust a 21 per cent nett net CAGR implicit FY24-FY26. The banal is presently trading astatine a P/E of 41 times and 36 times its FY25E and FY26E net respectively. Factoring successful upwardly revised estimates led by a beardown request environment," said Sharekhan.

Brokerage steadfast Prabhudas Lilladher maintained a bargain telephone connected the banal but raised the people terms to ₹5,188 from ₹5,094 earlier.

"We proceed to support our affirmative presumption connected Supreme Industries fixed (1) capableness enlargement successful antithetic geographies, (2) caller merchandise expansion, (3) wide cookware India distributors, and (4) currency surplus of ₹11.8 cardinal for backing enlargement plans," Prabhudas Lilladher said.

The brokerage steadfast estimates Supreme Industries' FY24-26E revenue, EBITDA and PAT CAGR of 17.7 per cent, 21.9 per cent and 21.4 per cent, respectively, with measurement CAGR of 16.1 per cent and EBITDA borderline betterment of 110bps.

"We person upward revised our net estimates for FY25 and FY26 by 3.9 per cent and 1.9 per cent and revised people terms to ₹5,188 ( ₹5,094 earlier), based connected 40 times FY26 EPS positive 25 per cent discount to Supreme Petrochem’s stake," Prabhudas Lilladher said.

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Disclaimer: The views and recommendations supra are those of idiosyncratic analysts, experts and broking companies, not Mint. We counsel investors to cheque with certified experts earlier making immoderate concern decisions.

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Published: 29 Apr 2024, 11:39 AM IST