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Informist, Wednesday, Jul. 23, 2025

By Akash Mandal

MUMBAI – Supreme Industries Ltd. is expected to report an on-year decline in its net profit for the June quarter despite a likely rise in top line and volume. The fall in net profit is likely due to lower realisations in the pipes segment on volatile polyvinyl chloride prices during the quarter, brokerages said. A rise in depreciation compared with the year-ago quarter is also likely to weigh on the pipe-maker's profit.

The company's consolidated net profit is likely to fall nearly 11% on year and 17% sequentially to INR 2.45 billion in Apr-Jun, according to an average of estimates from nine brokerages. The highest estimate for the bottom line is INR 2.74 billion by Anand Rathi Share and Stock Brokers Ltd. while the lowest is INR 2.23 billion by Nuvama Wealth Management Ltd.

"Adjusted profit after tax is expected to marginally decline by 3% YoY due to increased run rate of depreciation than last year," Motilal Oswal Financial Services said in a report.

The company is likely to report a consolidated revenue of INR 28.03 billion for the reporting quarter, up over 6% on year, according to the average of estimates from nine brokerages. Sequentially, the top line is seen falling over 7%. Anand Rathi has the highest revenue estimate of INR 29.61 billion. HDFC Securities Ltd. has the lowest estimate of INR 26.79 billion.

"Revenue growth to be 6% YoY as a 5% YoY fall in piping realisations is likely to be partially offset by a 10% YoY rise in piping volumes," Nuvama said in its report. Motilal Oswal said the company's top line growth is likely to be driven primarily by healthy growth in segments other than plastic pipes. The other segments include industrial products, packaging products, and consumer products.

Volumes are likely to grow on year, but realisations are likely to be hit due to high raw material prices, most brokerages said. For the quarter ended June, Nuvama sees the company's pipes, packaging, and consumer segment volumes rising 5%, 14%, and 4% on year, respectively. Motilal Oswal expects the company's plastic pipes and industrial segment sales to grow 5% and 9% on year, respectively.

Dolat Capital Market Pvt. Ltd. expects Supreme Industries to report soft volume growth for the June quarter. "Pipes and fittings volume growth for the first quarter of FY26 is likely to remain muted (5.7% YoY growth for the coverage universe) due to continued subdued channel activity and lower restocking at the dealer level, as the anti-dumping duty on PVC resin is still awaited," the brokerage said.

The company's earnings before interest, tax, depreciation, and amortisation for the reporting quarter is likely to fall 1% on year and nearly 8% on quarter to INR 3.85 billion, as per estimates by eight brokerages. Its EBITDA margin is likely to fall on year, with only Anand Rathi expecting the EBITDA margin to expand to 15.5%. IDBI Capital Market Services Ltd. sees the company's EBITDA margin at 14.5%. Other brokerages expect the company to report a margin between 13% and 14%, with YES Securities Ltd. having the lowest estimate at 13.5%.

The company had reported an EBITDA margin of 14.7% in the quarter a year ago and 13.8% in the previous quarter. "EBIT/kg for pipes to decline 24.3% YoY and that for blended plastic to decline 17.3% YoY," ICICI Securities Ltd. said.

Some brokerages also pointed out that raw material costs were elevated during the June quarter. "PVC prices remained volatile in FY25, leading to cautious buying sentiment. Prices increased INR 3.5/kg since May 21, after falling INR 6.3/kg from Apr. 1 to May 20...a sustained price uptick post (the) anti-dumping duty could provide the much-needed revival in demand," Dolat Capital said.

Antique Stock Broking Ltd. sees the early onset of monsoon to have adversely affected volumes of pipe makers such as Supreme Industries, which have a significant exposure to the agricultural pipes segment. "Given the net decline in PVC prices during the quarter, companies are likely to incur inventory losses," the brokerage said.

Supreme Industries will report its earnings for the June quarter Thursday. Investors will wait for management's outlook on agricultural pipe demand, capacity expansion plans, new product launches, and overall demand scenario in the near term, IDBI Capital said. At 1201 IST, shares of the company were up 0.3% at INR 4,101.50 on the National Stock Exchange.

The stock is up 17% from its closing price on Apr. 24, when the company reported its results for the March quarter. Its March quarter bottom line had fallen 17% on year to INR 2.94 billion due to lower government spending on infrastructure, unseasonal rainfall, and volatile PVC prices. Its March quarter top line had grown marginally on year to INR 30.27 billion.

Of the 12 research reports on the company available with Informist, six have a 'buy' or equivalent rating on the stock with an average target price of INR 4,214. Elara Securities (India) Pvt. Ltd. has a 'reduce' rating on the stock. The remaining five have a 'hold' or equivalent rating. 

Following are the Apr-Jun earnings estimates for Supreme Industries based on reports from nine brokerages in descending order by the estimate of net profit:

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Nishant Maher

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