ICICI Securities:  Supreme Industries -Faster-Than-Expected Recovery Post Covid-19 Led Lockdown; Perfect Recipe For Re-Rating
Fire retardant elastomeric Nitrile rubber tubing (NBR) for Pipe insulation manufactured by Supreme Industries Ltd. (image: Company website)

ICICI Securities: Supreme Industries -Faster-Than-Expected Recovery Post Covid-19 Led Lockdown; Perfect Recipe For Re-Rating

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

Supreme Industries Ltd.’s re-rating is driven by -

1. faster-than-expected recovery post Covid-19 led lockdown - mere 3.4%/3.7% volume/value decline in July and August 2020 (Source: Chairman’s speech at its recently concluded annual general meeting);

2. higher (double-digit) growth expectations post FY21 in its core segments – plastic piping and Silapulin;

3. likely improvement in asset turns over the next two to three years with huge capex over FY20-FY21 going into the production next year;

4. reducing dependence on commodity-led industrial and consumer product segments;

5. higher Ebitda margin trajectory driven by increasing share of value added products (VAP) revenues, further decentralisation of plants, superior product mix and operating leverage; and

6. fast improving return on capital employed led by strong traction in profitability and higher fixed asset turns.

Click on the attachment to read the full report:

ICICI Securities Supreme Industries Company Update.pdf

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