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Informist, Friday, Jul. 24, 2026

 

By Shreya Shetty

 

MUMBAI - Volatility in prices of polyvinyl chloride is likely to dictate the performance of Supreme Industries Ltd. in the June quarter. The company is expected to post a firm performance on year as PVC prices remain higher than a year ago, supporting realisations, according to analysts. However, prices of the raw material declined considerably from the March quarter, which is likely to result in a decline in piping volumes and destocking at the distributor level, pulling the quarter-on-quarter performance down, they said.

 

The plastic pipes manufacturer's consolidated net profit is expected to rise more than 10% on year to INR 2.23 billion in the June quarter, according to the average of estimates from 10 brokerages. The highest estimate for the company's bottom line is INR 2.72 billion by Prabhudas Lilladher Pvt. Ltd., while the lowest is INR 1.89 billion by Elara Securities (India) Ltd.

 

The company's consolidated revenue is seen rising nearly 14% on year to INR 29.71 billion during the reporting quarter. The highest estimate for the company's net sales is INR 31.91 billion by Anand Rathi Share and Stock Brokers Ltd., and the lowest is INR 27.97 billion by JM Financial Institutional Securities Pvt. Ltd.

 

From the March quarter, the company's net profit is expected to fall more than 48%, while revenue is seen down nearly 16%. The company's poorer performance from the March quarter is likely due to the decline in PVC prices, analysts said. Supreme Industries had reported a consolidated net profit of INR 4.33 billion for the March quarter on revenues of INR 35.28 billion. In the year-ago quarter, the company had reported a consolidated net profit of INR 2.02 billion on revenues of INR 26.09 billion.

 

Global PVC prices slipped in the June quarter after a significant rise during the March quarter in line with higher crude oil prices and supply constraints due to the West Asia war. PVC prices were at INR 117 per kilogram at the beginning of April, and rapidly declined by over 23% to INR 90 per kg by mid-April, according to JM Financial.

 

However, PVC prices remained higher on year, supporting the company's growth from the previous year. Raw material inflation remained elevated for most of the quarter, supporting realisations. Modest growth in piping volumes is also likely to support the rise in performance on year.

 

"The pipe segment revenue is expected to jump 29% YoY, fuelled by 14% volume growth and a higher realisation. The non-pipes segments are anticipated to report a moderate volume growth and broadly stable margins," Motilal Oswal Financial Services Ltd. said in a report.

 

On the other hand, some analysts anticipate a decline in piping volumes growth due to the fall in PVC prices. Nuvama expects the company's piping volume to fall 4% from the previous year, while JM Financial sees volumes down 5% on year. Destocking at the distributor level weighed on the volume of major plastic pipe producers such as Supreme Industries, according to the brokerage.

 

The sharp decline in PVC prices from the previous quarter is also likely to have triggered inventory losses during the June quarter, though analysts' expectations on the matter are conflicting. "We expect an inventory loss in 1QFY27 owing to a dip in the PVC price. However, we have not factored it into our estimates due to a lack of information," Motilal Oswal said. On the other hand, Prabhudas Lilladher noted that there was an absence of inventory losses during the reporting quarter.

 

The company's earnings before interest, tax, depreciation and amortisation for the reporting quarter are seen at INR 3.97 billion, up more than 24% on year, according to estimates of eight brokerages. Estimates for the company's EBITDA range from INR 3.63 billion by Elara Securities to INR 4.42 billion by Prabhudas Lilladher.

 

Most brokerages see the EBITDA margin between 13.2% and 14.7%, which is higher on year but lower from the trailing quarter, largely due to the movement in PVC prices.

 

At the management interaction, brokerages will monitor the company's outlook on agri pipes demand, capacity expansion plans, new product launches, and the overall demand scenario in the near term, according to IDBI Capital Market Services Ltd.

 

Analysts will also monitor the movement in PVC prices for further cues. Prices of the raw material are likely to remain range-bound at INR 80-INR 90 per kg levels, with potential customs duty reinstatement capping the downside amid the rupee's depreciation and stabilised raw material supply, according to Elara Securities.

 

At 1104 IST, shares of Supreme Industries were down 0.8% at INR 3,389.1 on the National Stock Exchange. The company's shares have fallen more than 8% since it announced its March quarter earnings on Apr. 27. The company will announce its June quarter earnings on Tuesday.

 

Of the 12 brokerage reports on the company available with Informist, 10 have a 'buy' or equivalent recommendation on the stock with an average target price of INR 4,289, nearly 27% higher than the current market price. One brokerage has a 'hold' recommendation, and another has a 'sell' recommendation for the stock, with target prices of INR 3,728 and INR 3,850, respectively.

 

Supreme Industries is a major plastic processor headquartered in Mumbai. The company produces plastic piping systems, moulded furniture, packaging films, and industrial components.

 

Following are the June quarter earnings estimates for Supreme Industries from 10 brokerages in descending order by the estimate of net profit in INR billion:

 

Brokerage	Net sales	Net profit	EBITDA
Prabhudas Lilladher Pvt. Ltd.	30.12	2.72	4.42
Motilal Oswal Financial Services Ltd.	31.89	2.50	4.22
Anand Rathi Share and Stock Brokers Ltd.	31.91	2.34	-
Nuvama Wealth Management Ltd.	28.45	2.21	4.12
ICICI Securities Ltd.	28.19	2.19	3.84
JM Financial Institutional Securities Pvt. Ltd.	27.97	2.17	3.80
IDBI Capital Market Services Ltd.	30.40	2.16	4.10
HDFC Securities Ltd.	30.16	2.09	3.63
360 ONE Capital Market Pvt. Ltd.	28.39	2.05	-
Elara Securities (India) Pvt. Ltd.	29.62	1.89	3.63
Average	29.71	2.23	3.97

End

 

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

 

Edited by Himanshi Gupta

 

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