Sharekhan's research report on Supreme Industries
Revenue in-line, margins beat estimates; impressive operating performance led by better product mix, higher contribution of value-added products and good inventory gains. Even though FY2021E is going to be a weak year, we expect gradual recovery of growth in FY2022E led by pick-up in demand in the housing and infrastructure segment and upcoming opportunities from government initiatives. Margin is expected to decline in FY2021, owing to higher inventory loss (sharp fall in PVC prices), anticipated decline in margins across the segments and a reduction in discretionary spends.
Outlook
We maintain our Buy rating on Supreme Industries Limited (SIL) with a PT of Rs. 1,120.
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