Supreme Industries Ltd's Q3FY19 consolidated net profit declines 22.3% yoy to Rs81cr: Misses Estimates

The company’s consolidated revenue in the quarter stood at Rs1,410cr, up 10.3% yoy and 7.2% qoq.

Jan 24, 2019 11:01 IST India Infoline Research Team

Supreme Industries Ltd Q3FY19

Consolidated Results Q3FY19: (in Rs cr)

Q3FY19 YoY (%)
Revenue 1,410.41 10.3
EBITDA 175.64 [11.2]
EBITDA Margin (%) 12.5 [302]
Net Profit (adjusted) 80.98 [22.3]
***EBITDA margin change is bps
Supreme Industries' Q3FY19 numbers were below the consensus expectations on all fronts. The company's consolidated revenue for the quarter grew 10.3% yoy to Rs1,410cr against the median consensus estimates of Rs1,468cr. EBITDA came in at Rs175.6cr, down 11.2% yoy vs the median consensus estimates of Rs212cr. EBITDA margin contracted 302bps yoy to 12.5%.  PAT came in at Rs80.98cr, down 22.3% against the median consensus estimates of Rs109cr. 
  • Top-line growth was driven by ~4% yoy growth in volumes and a ~6% increase in pricing. EBITDA margin contraction was on account of correction in polymer prices. Competition in XF film margins led to a margin decline of ~5% in that business.
  • Growth was led by 20% yoy growth in plastics piping products and 19% yoy growth in consumer products. Industrial products grew 3% yoy while packaging products declined 4% yoy.
  • As for volumes, plastic piping was up 9% yoy, packaging volumes were down 10% yoy, industrial products were up 2% yoy and consumer products volumes were up 5% yoy.
  • Plastics piping products' margins contracted 85bps yoy to 12.3%, industrial products' margins contracted 362bps yoy to 9.9%, packaging products' margin contracted 742bps yoy to 14.5%, and consumer products' margins contracted 169bps yoy to 15.6%.
  • During the quarter, polymer prices, excluding PVC, declined 14-16%, while PVC prices remained flat. Going forward, the company believes that polymer prices, excluding PVC, will remain at the current lower levels. This augurs well for the company's business prospects for Q4FY19.
  • The company expects to attain volume growth in excess of 10% and value growth in excess of 15% in the current year.
  • The share of overall sales in the value-added products has been 38% of the total sales as against 40% in the corresponding quarter of the previous year.

Technical View:

Supreme Industries Ltd share price ended at Rs1,045.90, down 23.6 points, or 2.21%, from its previous close of Rs1,069.50 on the BSE. The scrip opened at Rs1,069.60 and touched a high and low of Rs1,078 and Rs1,036.55, respectively. A total of 78,921 (NSE+BSE) shares were traded on the counter. The stock is currently trading above its 200-DMA.

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