Supreme Industries – We maintain ADD with a target price of Rs 4,060

EBITDA declined in September quarter

Supreme Industries (SIL) reported 12% consolidated volume growth (pipes/other segments 17/-4% YoY) in Q2. Consolidated revenue was up 5% YoY. EBITDA declined 7% YoY, owing to lower gross margin and higher fixed cost. APAT fell 20% YoY due to reduced EBITDA, lower associate profit, and increased depreciation. The management revised its overall volume growth guidance for FY26 to 12–-14%, down from the earlier estimate of 14–15%.

For plastic piping division, company maintained its volume growth guidance at 15%-17%

For the plastic piping division, the company maintained its volume growth guidance of 15-17% for FY26. However, it lowered the upper band of the EBITDA margin guidance to 14.5–15%, from 14.5–15.5% earlier. The management remains confident of healthy agricultural and plumbing demand in H2FY26. We value the company at 40x Sep’27 EPS and its 30.8% holding in its associate Supreme Petrochem at a 30% discount to its current market cap. We maintain ADD on Supreme Industries with a target price of INR 4,060/sh.

Disclaimer : This content is only for informational purpose. Do not make any investment based solely on this recommendation as it is not based on your unique risk profile or investment goals. Investments in security markets and stocks are subject to market risks and other risks. There is no guarantee of the return that will be given.

Source: HDFC Securities Institutional Equities

To see full report and full disclaimer, click on: https://www.hdfcsec.com/hsl.docs/HSIE%20Results%20Daily%20-%2028%20Oct%2025%20-%20HSIE-202510280650008490471.pdf?t=281020256593450