Supreme Industries Ltd announced its financial results for the fiscal year ending March 31, 2022 on Friday. The company's Board of Directors also recommended a final dividend of 900 per cent, being Rs. 18/- per share with a face value of Rs 2/-. The dividend yield goes to 0.89 per cent at the current market price of Rs 2,003, and after releasing its quarter and fiscal year ending March 31, 2022, brokerage company Sharekhan has put a buy call on the stock with a target price of Rs 2,500. The company's 80th Annual General Meeting of the Members is set for Wednesday, June 29, 2022, at 4 p.m. If approved at the 80th Annual General Meeting, the Board's recommended dividend will be paid on or after July 5, 2022 and 22nd June 2022 has been fixed as the record date.

Result update The brokerage firm Sharekhan has said "Supreme Industries Limited (SIL) reported better-than-expected consolidated revenues for Q4FY2022 at Rs. 2557 crore, up 22.7% y-o-y led by strong overall 15.6% y-o-y growth in plastic goods volumes. However, OPM at 15.3% (down 920bps y-o-y, down 100 bps q-o-q) was affected by a change in product mix (higher share of agri pipe sales). Consequently, operating profit and net profit declined by 23% y-o-y and 28% y-o-y to Rs. 391 crore and Rs. 324 crore, respectively, although were ahead of our estimates. The decline in PVC prices led by higher Chinese imports is expected to drive demand during FY2023. The management conservatively pegs volume growth at a minimum of 15% y-o-y for FY2023. At operating level, it targets higher than Rs. 30/kg EBITDA for FY2023. The company is undertaking a Rs. 700 crore capex (including Rs. 280 crore carry forward commitments) majorly for expanding capacity in Plastic Piping, which will be funded through internal accruals."   Buy for a target price of Rs. 2,500 The brokerage has claimed that "SIL has been continuously gaining market share led by healthy demand environment and continuous capacity expansion. PVC prices are expected to be rangebound during FY2023 driving overall demand. The company's aggressive expansion plans which are funded entirely through internal accruals is expected to keep its balance sheet strong. A healthy demand outlook along with incremental capacity additions is likely to provide healthy double digit revenue growth over FY2022-FY2024. SIL is expected to benefit from strong housing demand and government schemes such as 'Nal se Jal'. We retain a Buy rating on the stock with an unchanged PT of Rs. 2,500." Slowdown in demand offtake from the user industry can impact revenue growth rates and adverse commodity price fluctuation might impact margin profile, according to Sharekhan. Disclaimer The stock has been picked from the brokerage report of Sharekhan. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.

The brokerage firm Sharekhan has said "Supreme Industries Limited (SIL) reported better-than-expected consolidated revenues for Q4FY2022 at Rs. 2557 crore, up 22.7% y-o-y led by strong overall 15.6% y-o-y growth in plastic goods volumes. However, OPM at 15.3% (down 920bps y-o-y, down 100 bps q-o-q) was affected by a change in product mix (higher share of agri pipe sales). Consequently, operating profit and net profit declined by 23% y-o-y and 28% y-o-y to Rs. 391 crore and Rs. 324 crore, respectively, although were ahead of our estimates. The decline in PVC prices led by higher Chinese imports is expected to drive demand during FY2023. The management conservatively pegs volume growth at a minimum of 15% y-o-y for FY2023. At operating level, it targets higher than Rs. 30/kg EBITDA for FY2023. The company is undertaking a Rs. 700 crore capex (including Rs. 280 crore carry forward commitments) majorly for expanding capacity in Plastic Piping, which will be funded through internal accruals."

The brokerage has claimed that "SIL has been continuously gaining market share led by healthy demand environment and continuous capacity expansion. PVC prices are expected to be rangebound during FY2023 driving overall demand. The company's aggressive expansion plans which are funded entirely through internal accruals is expected to keep its balance sheet strong. A healthy demand outlook along with incremental capacity additions is likely to provide healthy double digit revenue growth over FY2022-FY2024. SIL is expected to benefit from strong housing demand and government schemes such as 'Nal se Jal'. We retain a Buy rating on the stock with an unchanged PT of Rs. 2,500."

Slowdown in demand offtake from the user industry can impact revenue growth rates and adverse commodity price fluctuation might impact margin profile, according to Sharekhan.

The stock has been picked from the brokerage report of Sharekhan. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.