Supreme industries posts over two fold jump in profit

Supreme industries, a leader in the plastics processing industry, has reported a 40.20 per cent growth in consolidated net profit of Rs 74.21 crore for the December quarter 2015. However, the consolidated PAT, including profit from associates, grew by 133 per cent Y-o-Y to Rs 82.14 crore, as against Rs 35.26 crore in the corresponding quarter of the previous year.

Supreme Petrochem is an associate company wherein Supreme Industries and the R Raheja Group own 29.99 per cent each in the company. It’s a market leader with over 50 per cent market share; and exports to over 70 countries.

Consolidated revenue for the quarter de-grew by 6 per cent to Rs 1,001.74 crore in Q2FY16 due to zero income from construction business, as against Rs 46 crore in Q2FY15.

Plastic segment posted almost flat revenue quoting Rs 989.48 with volume growth of 4.9 per cent Y-o-Y during the quarter. However, realisation dipped due to passing on of benefits of falling raw material prices. Overall volume grew 4.9 per cent Y-o-Y to 46,613 MT in Q2FY16, as against 73,044 MT in Q2FY15. Going forward, the company expects volume between 12-15 per cent in the remaining nine months of the current financial year.

Operating profit of the company grew by 20.5 per cent Y-o-Y to Rs 155.12 crore. The EBITDA margin rose by 340 bps Y-o-Y to 15.49 per cent due to 533 bps Y-o-Y decline in raw material cost as a percentage of revenue, which was partially offset by rise in other expenses.

The management is optimistic about the growth from composite LPG cylinder front, given the recent announcement of launching the Composite LPG cylinder by Ministry of Petroleum. The company has also received an order from HPCL for 4,500 pcs of composite cylinder comprising of two sizes i.e. 5kg and 10 kgs which is expected to be supplied by February 2016.

The share of value‐added products, as percentage of revenue, stands at 42.38 per cent in Q2FY16, as against 38.20 per cent in Q2FY15. The Company’s focus remains in the direction of increasing the share of value added products in its turnover.

In Plastic segment, Plastic piping segment grew by 4 per cent in terms of volume; however remained flat in value terms. The Packaging segment grew by 13 per cent both in value and volume term; whereas Industrial segment de-grew by 12 per cent in volume and, 21 per cent in value terms. The Consumer segment grew by 23 per cent in volume, and by 12 per cent in value terms.

The company also declared a divined of Rs 2.5 per share along with this result. Today stock price closed at 686.40, up by 2.71 per cent.