Supreme Industries

Call was addressed by Mr. M P Taparia MD-Key highlights by Capital Mkt
There was a volume growth of 16.5% to 57226 MT and value growth of 5.6% to Rs 755.21 crore for the quarter ended Sep’15 on YoY basis.Sale of value added products stood at 32.31% Vs 29.18% on YoY basis.Plastic piping business value wise grew by around 14% and 26% in volume terms during the Sep’15 quarter. The segment reported an OPM of around 13.5% for Sep’15 quarter as compared to 12.6% for Sep’14 quarter.
Packaging products value wise de-grew by around 0.6% and grew volume wise about 4% in during the Sep’15 quarter on YoY basis. The segment reported an OPM of around 15.5% for Sep’15 quarter as compared to 13.1% for Sep’14 quarter.
Industrial segment value wise de-grew by around 12% and de-grew by 1.9% in volume terms during the Sep’15 quarter on YoY basis. The segment reported an OPM of around 9.7% for Sep’15 quarter as compared to 9.3% for Sep’14 quarter.
Consumer segment value wise grew by around 14% and 10% in volume terms during the Sep’15 quarter. The segment reported an OPM of around 11.2% for Sep’15 quarter as compared to 7.8% for Sep’14 quarter.The company expects to incur a capex of about Rs 200 crore for 9 months ended FY’16. Management expects commercial production of new units to Kharagpur and Malanpur to commence from Nov’15 onwards. Entire capex will be through internal accruals.The prices of raw material moved downwards during Sep’15 quarter. Management expects overall raw material prices to remain in range bound fluctuations and affordable.The company has received its first export order of US $ 55000 of CPVC fire sprinkler system in Sep’15 quarter.Also, the company expects to supply about 5000 pieces of Composite LPG cylinders to South Korea in Dec’15 quarter and expects tender from Government refineries for their requirement of about 8000-12000 pieces of composite cylinders in Dec’15 quarter.Average debt stands at around Rs 350 crore as compared to around Rs 500 crore on YoY basis. An average cost of borrowing is about 8.9%.
The company holds about 63800 sq feet of saleable are of supreme chambers and will sell at appropriate prices.Subsidy for Sep’15 stood at Rs 1.29 crore as compared to around Rs 6 crore in Sep’14 quarter.CPVC volumes and value stood at 2712 MT and Rs 75 crore for Sep’15 quarter as compared to 2054 MT and Rs 55 crore for Sep’14 quarter.Piping Industry growth was around 12-13% as compared to 26% growth in piping business for the company. Most of the growth in piping came from housing.More sale of value added product has resulted in higher realization in consumer product segment.
Agriculture was better in Oct 2015 on YoY basis and demand should be better in H2 FY’16 for piping segment.Material handling division has grown in volume terms by 7%. Industrial segment volumes were lower by 6% and were lower by14% in value terms due to tough times of industries. Both automotive and non-automotive segment have suffered in Sep’15 quarter.
The company expects to achieve volume growth of around 15-18% for 9 months ended March 2016. Management expects about Rs 3200 crore to Rs 3300 crore turnover for 9 months ended Mar’16, unless there is a major movement in raw material prices. OPM is expected to remain around 13.5% for 9 months ended Mar’16.