Supreme posts in line performance in Q3SUPREMEIND - 4461 Change: 29.65 (0.67 %)
News: Supreme Industries’ revenue growth at ~6% YoY to ~Rs.1945 crore was in line with our estimate The revenue growth was largely driven by price hikes. However, overall volume offtake during the period declined 18% (higher than our estimated decline of 10%) mainly due to high volatility in PVC prices and lower agri demand. The EBITDA margin declined 544 bps YoY to 16.3%due to higher raw material prices and change in product mix. PAT declined 21% to Rs.245.7 crore.
Views: Supreme's’ Q3FY22 performance was in line with our estimates. The company reported revenue growth of 6% YoY even on a higher base (of 34% growth in Q3FY21). As expected, the quarter witnessed lower volume offtakes due to weak agri demand amid extended monsoon. However, the management expects good volume traction from Q4FY22 onwards amid stability in the PVC prices. This along with long term growth drivers such as revival in housing sector and higher infrastructure spend remains intact for PVC piping industry. We maintain our positive stance on the company.