2025-11-16 17:50:15
Latest Post
Karnataka Bank appoints Veteran Banker Mr Raghavendra S Bhat as its New Managing Director & CEO
Websol signs MoU with Andhra Pradesh Economic Development Board
Sellwin Traders Ltd has signed MOU to acquire 36% Equity Stake in Kumkum Wellness
Western Carriers Reports Q2 & H1 FY26 Results
Lupin announces closure of Inspection by U.S. FDA at its Nagpur Unit-1 Facility with No Observations
Research
Supreme Industries - Result Update - Dolat Capital
Posted On : 2012-04-26 21:06:41( TIMEZONE : IST )
Revenue in-line with estimates
Supreme Industries (SIL) for Q3FY12 has reported net revenues at Rs.7.6bn (Dolat Est. Rs.7.6bn), YoY growth of 16% on back of 25% & 22% growth YoY in the packaging products & industrial product segment respectively which helped negate the lower than expected growth in plastic piping (13%) and consumer product segment (de-growth of 3%). Volume growth remained flat at 65,984 tonnes (below Dolat estimates) while realization grew by 16% (ahead of Dolat estimates).
Impressive operating performance powered by 100 bps expansion in margins
SIL's operating margins improved by 100bps from 12.8% in Q3 FY11 to 13.8% in Q3 FY12, led by inventory gains and lower cost of imported raw material on account of rupee appreciation. This resulted in EBIDTA growing by 25% YoY to Rs.1.05bn from Rs.0.84bn (Dolat Est. Rs.1.06bn).
Core profitability rises 25% to Rs.493mn
Profits from the core business (adjusted for construction business profits & excluding share of associates) grew by 25% to Rs.493mn as compared to Rs.394mn (Dolat Est. Rs.494mn). On consolidated basis (including share of associates & construction business), SIL has reported a growth of 13% to Rs.547mn from Rs.483mn YoY.
- Revenues in line with our expectations
- Flat volume growth a disappointment
- Core profitability up 25%, in line with estimates
- View: We maintain Accumulate with a target price of Rs.235
Our View:
After the disappointing H1FY12, SIL has managed to post healthy Q3FY12 performance despite facing strong headwinds like subdued economic environment and higher input costs. With the margins expected to improve further in the last quarter, we expect the company to report better profitability in Q4FY12.
SIL currently trades at 13.3x & 10.1x its FY12E & FY13E earnings. We value SIL's core business at Rs.225 per share based on 12x its FY13E earnings of Rs.18.7. Further, SIL's 29.88% stake in SPL is valued at Rs.10. Thus, the SoTP valuation (one year forward) for SIL comes to Rs.235 per share. We maintain our “Accumulate†rating on the stock.
