BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Systematix Research Report
Supreme Industries Ltd.’s Q3 FY22 volumes (down 18% YoY, 11% QoQ) were impacted by weak demand in pipes, furniture and packaging products. Volatile PVC prices (down 15% in November 2021) dented trade sentiment and led to destocking.
However, Supreme Industries expects polyvinyl chloride prices to rise from February 2022 and volumes to rebound in Q4.
Adequate price hikes will enhance margins in the packaging segment. Cash surplus should improve on the normalisation of inventory. Its long-term prospects are intact but at ~26 times FY24E price/earnings (27 times, the five-year mean) and a flattish earnings compound annual growth rate over FY21-24.
Polymer price movement and earnings growth/free cash flow are key monitorables.
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