Supreme Industries

Margins spurt

May 23, 2020 12:05 IST capital market

In quarter ended Mar20, consolidated sales fell 7% to Rs 1430.49 crore. The company sold 103200 tonne of plastic goods in Q4FY20 against sales of 113921 tonne of plastic goods in the corresponding quarter of previous year achieving volume and product value degrowth of about 9% and 7%, respectively.

OPM rose 620 basis points to 19.1% which saw OP rose 33% to Rs 268.43 crore. Profit from the construction business was Rs 5 crore compared to nil in Q4FY19. OP including construction business was up 35% to Rs 273.43 crore.

Other income fell 98% to Rs 6 lakh and interest cost decreased 34% to Rs 4.21 crore. As depreciation grew 10% to Rs 52.87 crore, PBT before EO rose 44% to Rs 216.41 crore. The company had nil EO income/expenditure during the quarter compared to EO income of Rs 11.31 crore in Q4FY19. PBT after EO rose 34% to Rs 216.41 crore. Tax provision rose 117% to Rs 106.1 crore compared to tax provision of to Rs 48.86 crore. PAT fell 2% to Rs 110.31 crore.

Profit in JV was Rs 6.97 crore compared to Rs 11.09 crore in Q4FY19. Finally net profit fell 5% to Rs 117.28 crore.

FY 2020 consolidated results

In FY 2020, sales fell 2% to Rs 5511.54 crore. The company sold 411521 tonne of plastic goods during FY20 against sales of 397983 tonne in the previous year achieving volume growth about 3% and product value degrowth of about 1%, respectively. The overall turnover of value added products increase to Rs. 2070 crore as compared to Rs. 1944 crore in the previous year achieving growth of 6%.

OPM rose 210 basis points to 15.1% which saw OP rose 14% to Rs 829.55 crore. Profit from the construction business was Rs 5 crore compared to Rs 54 crore in FY19. OP including construction business was up 6% to Rs 834.55 crore.

Other income fell 82% to Rs 1.43 crore and interest cost fell 22% to Rs 20.19 crore. As depreciation grew 12% to Rs 205.68 crore, PBT before EO rose 5% to Rs 610.11 crore.

EO gains were nil compared to Rs 67.19 crore. Thus PBT after EO fell 6% to Rs 610.11 crore.

As tax fell 19% to Rs 173.92 crore, PAT remained flat at Rs 436.19 crore.

Profit in JV rose 117% to Rs 31.21 crore. Finally net profit rose 4% to Rs 467.4 crore.

Mr. M. P. Taparia, Managing Director, The Supreme Industries Limited, said:

At the end of the year i.e. beginning second half of March 2020 the business was severely affected due to Covid-19 Pandemic. The Lockdown is now entering in its fourth stage. As the time passes, the focus of Government is moving to create a balance between Health and Safety of the Countrymen while keeping eyes to revive the economy back on growth path.

Government is taking incremental steps every day in different parts of the country to give desired boost to the economy. With the Countrys preparedness over the last two months to prepare to fight against Covid-19 Pandemic which is being suitably supported by various relief measures announced by central Government which is around 10% of Indias annual GDP, it is expected that during second quarter of the year 2020-21 the economy would start to revive to serve the country with a higher growth potential.

Considering the bright future prospects, the Company has not slowed down its investment plans. The same was however delayed due to cessation of activities in different parts of the country as a result of Lockdown which still remains partially applicable in various parts of the country.

Various initiatives taken by the center and state governments have given desired boost to the plastic pipe business. There is quantum jump in construction of affordable houses. The infrastructure activities comprising supplying drinking water and to boost the sewage system have gathered momentum.

Raw material scenario is likely to be comfortable. Prices have started showing increasing trend after reaching to bottoms during the year under review except PVC Resin. Overall it is expected that raw material prices shall remain range bound and affordable.

The Company expects that by September this year the business should be returning to normalcy and will move to growth path by November, 2020.

Other details

Total Net Borrowing of the company stands at Rs. 217 crore as on 31st March ,2020 as against Rs. 162 crore as on 31st March, 2019. Average Net Borrowing level during the current year remained at Rs. 205 crore against Rs. 266 crore in the previous year. Average Cost of Borrowings as on 31st March, 2020 increased to 8.35 % p.a. as against 8.23 % p.a. as on 31st March, 2019.

The company has divested its whole 20.67% stake Kumi Supreme India Private Ltd to Kumi (Thailand) Co. Ltd for a consideration of Rs. 24.32 crore & consequently terminated the existing joint venture agreement between the Company and Kumi Supreme India Private Ltd. As an outcome of sale, Kumi Supreme India Private Ltd now ceases to be an associate of the company.

The Board of Directors has not recommended any further dividend on equity shares for FY20. The 2nd Interim dividend on equity shares declared and paid shall be considered as final dividend for the FY20. The total dividend paid on 12,70,26,870 equity shares of Rs.2/- each during the year under review is Rs. 14 /- per equity shares as against Rs. 13 /- per equity share during previous year. The total dividend outgo during the year under review including tax on distribution is Rs. 214 crore as compared to Rs. 199 crore during previous year.

The stock trades at Rs 978.

Supreme Industries: Consolidated Results

 

2003 (03) 1903 (03) Var. (%) 2003 (12) 1903 (12) Var. (%)
Sales 1430.49 1530.91 -7 5511.54 5611.99 -2
OPM (%) 19.1 12.9 15.1 13.0
OP 268.43 202.0 33 829.55 730.6 14
Profit from construction business 5.0 0.0 5.00 54.00
OP including construction business 273.43 201.99 35 834.55 784.57 6
Other inc. 0.06 3.08 -98 1.43 7.78 -82
PBIDT 273.49 205.07 33 835.98 792.35 6
Interest 4.21 6.42 -34 20.19 26.00 -22
PBDT 269.28 198.65 36 815.79 766.35 6
Dep. 52.87 48.13 10 205.68 183.54 12
PBT before EO 216.41 150.52 44 610.11 582.81 5
EO 0.00 -11.31 0.00 -67.19
PBT after EO 216.41 161.83 34 610.11 650.00 -6
Total Tax 106.10 48.86 117 173.92 215.75 -19
PAT 110.31 112.97 -2 436.19 434.25 0
Share of profit from associate 6.97 11.09 -37 31.21 14.38 117
Net Profit 117.28 124.06 -5 467.40 448.63 4
EPS (Rs) * # # 36.8 31.8
* Annualised on current equity of Rs 25.41 crore. Face Value: Rs 2 each
# EPS not annualised due to seasonality of business
EO: Extra Ordinary items, EPS is calculated after excluding EO and relevant tax
Figures in Rs crore, Var (%) exceeding 999 is restricted to 999
Source: Capitaline Database

Supreme Industries: Segment results

 

Segments 2003 (3) 1903 (3) Var. (%) % to Total 2003 (3) 1903 (3) Var. (%) % to Total
Sales
Plastic piping products 937.02 940.75 0 66 3444.87 3172.76 9 63
Industrial products 159.27 200.40 -21 11 673.19 885.02 -24 12
Packaging Products 207.58 267.44 -22 15 959.27 1041.81 -8 17
Consumer Products 94.98 98.32 -3 7 383.20 399.38 -4 7
Others 31.64 24.00 32 2 51.01 113.02 -55 1
TOTAL 1430.49 1530.91 -7 100 5511.54 5611.99 -2 100
PBIT
Plastic piping products 168.83 95.02 78 70 460.52 312.83 47 70
Industrial products 14.01 15.46 -9 6 32.58 63.57 -49 5
Packaging Products 33.36 29.91 12 14 101.51 127.83 -21 15
Consumer Products 18.52 18.28 1 8 57.60 55.95 3 9
Others 4.79 -0.25 -2016 2 4.97 53.68 -91 1
TOTAL 239.51 158.42 51 100 657.18 613.86 7 100

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