Supreme Industries - Q3FY21 First Cut - ICICI Direct
(Time Zone: Arizona, USA)
(CMP : Rs. 1721 Mcap Rs. 21863 crore)
Supreme Industries reported a strong set of numbers in Q3FY21 led by strong revenue growth and margin expansion. The result was much ahead of our estimates for the quarter.
Q3FY21 Earnings Summary
- Revenues came in at ~Rs. 1844 crore, up by ~34% YoY (Vs I-direct estimate: Rs. 1618 crore) led by higher realisation (up by ~19% YoY) during the quarter. The plastic piping segment revenue increased by 43% YoY to Rs. 1140 crore (Vs I-direct estimate: Rs. 987 crore) led by both volume and realisation growth of 9% and 31% YoY respectively. Additionally, Industrial and consumer product segments revenue were also higher by ~38% and ~13% YoY to Rs. 216 crore and 117 crore respectively on a lower base and strong demand from consumer durable/auto industries and plastic furniture categories respectively
- The gross margins increased by ~177 bps YoY mainly due to inventory gain and change in product mix (value added product category revenue increased by 33% YoY). Additionally, saving in other expenditure (down by 300bps YoY) helped drive EBITDA margin up by 570 bps YoY to 21.8% (Vs I-direct estimate ~19%).
- PAT came in at Rs. 312 crore up by 153% YoY (Vs Idirect estimate: Rs. ~197 crore) tracking strong operational performance and sharp increase in the profit from associates (up from Rs. 0.76 crore to Rs. ~53 crore)
We believe, Supreme Industries performance in Q3FY21 was better than our estimates on profitability front mainly due to higher realisation (better product mix) and inventory gains. Addition to this, despite a challenging scenario company maintained its debt free status net cash balance of Rs. 432 crore by the end of Q3FY21. We maintain our positive stance on the stock and detailed report will be released post Q3FY21 result con-call.
Shares of SUPREME INDUSTRIES LTD. was last trading in BSE at Rs.1721.15 as compared to the previous close of Rs. 1761.3. The total number of shares traded during the day was 4983 in over 845 trades.
The stock hit an intraday high of Rs. 1785 and intraday low of 1710.95. The net turnover during the day was Rs. 8730134.
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