Supreme Industries, a leading plastics player in the country, has weathered a difficult economy and reported good numbers while making plans to expand
Supreme Industries has reported very good numbers for the March 2013 quarter. The stock was recommended in one of our Kensource stockletters, on 27 April 2012. Total income and operating profit for the third quarter ended 31 March 2013 amounted to Rs917.68 crore and Rs134.35 crore, as compared to Rs768.55 crore and Rs104.75 crore for the corresponding quarter last year, an increase of 19.4% and 28.26% respectively. Net profit amounted to Rs75.83 crore when compared to Rs54.68 crore for the same period last year.
The stock was recommended at Rs208 on 27 April 2012 in the stockletter. The share price of the stock is currently quoting at Rs312 on the Bombay Stock Exchange (BSE).
Our Moneylife database threw some interesting statistics. The company’s net sales grew at 19% which exceeded its three-quarter year-on-year (y-o-y) growth rate of 16%. Likewise its operating profit increased 28% y-o-y, to Rs134.28 crore, which has also exceeded its three-quarter y-o-y growth rate of 16%. Yet despite these good numbers, the valuation remains somewhat subdued, with its market capitalisation quoting at 7.34 times operating profit and just 1.07 times its net sales, while return on networth is a jaw-dropping 41% while return on capital employed is 26%.
Supreme Industries processed 2,01,125 metric tonnes (MT) of polymers for the nine months ended March 2013 when compared to the 1,77,439 MT processed during the corresponding period last year, achieving volume growth of 13%.
The company’s ongoing expansion plans involves a total capital outlay of Rs435 crore and is progressing as per the plan. Some of the money used will be spent on a new unit at Hosur for protective packaging products, a unit in Gujarat for expanding capacities of cross laminated film, a state-of-the-art plant for production of composite cylinders and pipes at Gujarat and, finally, a plastic piping system near Gwalior which will be in production by May 2013.
During the current year, the company envisages annual growth in volume and product value of about 16% and 23% respectively over the previous year.
Supreme Industries is India’s leading processors of plastics, offering a wide and comprehensive range of plastic products in India.
For more information on Kensource stockletters, access this link
Inside story of the National Stock Exchange’s amazing success, leading to hubris, regulatory capture and algo scam
Fiercely independent and pro-consumer information on personal finance.
1-year online access to the magazine articles published during the subscription period.
Access is given for all articles published during the week (starting Monday) your subscription starts. For example, if you subscribe on Wednesday, you will have access to articles uploaded from Monday of that week.
This means access to other articles (outside the subscription period) are not included.
Articles outside the subscription period can be bought separately for a small price per article.
Fiercely independent and pro-consumer information on personal finance.
30-day online access to the magazine articles published during the subscription period.
Access is given for all articles published during the week (starting Monday) your subscription starts. For example, if you subscribe on Wednesday, you will have access to articles uploaded from Monday of that week.
This means access to other articles (outside the subscription period) are not included.
Articles outside the subscription period can be bought separately for a small price per article.
Fiercely independent and pro-consumer information on personal finance.
Complete access to Moneylife archives since inception ( till the date of your subscription )
