Supreme Industries Q3 FY13 results review
Supreme Industries (SIL) for Q3FY13 has reported net revenues at ` 9.04bn
(Dolat Est. ` 9.1bn), growth of 19% YoY on the back of impressive revenue
growth of ~42% YoY in its plastic piping segment. On the other hand, while
consumer & industrial product segment grew 9% & 1% respectively, the
packaging product segment de-grew by 5% YoY for the quarter under review.
Overall volume growth was quite impressive with 13% YoY growth at 74,526
tonnes (Dolat estimates at 75,000 tonnes) while realization grew by impressive
4.1%.
Impressive operating performance powered by 110 bps expansion in
margins
Higher operating margins during the quarter resulted in EBIDTA growing by
28% YoY to ` 1.34bn (Dolat estimates at ` 1.3bn). SIL’s operating margins
improved by 110bps from 13.8% in Q3 FY12 to 14.9% in Q3 FY13 (Dolat
estimates at 14.2%) due to: a) strong 14.7% margins (an increase of 170 bps
YoY) reported by plastic piping segment (53% of overall revenues) and b)
inventory gains.
Core profitability rises 38% to ` 680mn (higher than estimates)
Profits from the core business (adjusted for construction business profits &
excluding share of associates) grew by 38% to ` 680mn (Dolat estimates at `
631mn) as compared to ` 493mn. On consolidated basis (including share of
associates & construction business), SIL has reported a YoY growth of 39% to
` 758mn from ` 547mn YoY.
View: We roll our numbers to FY15. Thus change our rating to ‘BUY’from
‘ACCUMULATE’ with a revised target price of ` 409 (14xFY15E EPS)
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