Target: ₹4,200
CMP: ₹3,630.80
Supreme Industries has reported a robust fourth quarter for FY26, with volumes increasing by 16 percent year-over-year to 231,889 tonnes. The company’s EBITDA margin expanded by 391 basis points to 17.7 percent, bolstered by an inventory gain of approximately ₹70-80 crore due to the spike in PVC prices observed in March.
The plastic piping segment emerged as a key performer, with Q4 revenue climbing by 23.3 percent and volume rising by 18.3 percent, attributed to ongoing capacity expansions and channel restocking efforts. Additionally, packaging revenue increased by 7.2 percent, and volume rose by 10.1 percent, reflecting a strategic focus on value-added offerings. Demand in the agricultural sector has shown signs of recovery in Q1 following the PVC price correction, with no significant inventory challenges reported at distributor or retail levels.
Supreme Industries has committed over ₹1,000 crore in capital expenditures for FY27, including carry-forward projects. This investment will focus on greenfield piping initiatives in Patna (Bihar), Jammu, Gadegaon (Maharashtra), and a material handling facility in Malanpur (Madhya Pradesh). All capital expenditures are to be funded through internal accruals, which will allow the company to maintain a zero-debt status.
Management has provided guidance for FY27, projecting overall volume growth of 12-13 percent and 15-17 percent specifically for plastic piping, while expecting EBITDA margins to range between 14-14.5 percent. Over the past three months, the stock has appreciated by 10 percent, largely attributed to rising PVC prices.
The recommendation on Supreme Industries has been downgraded to “Accumulate,” and earnings estimates have been reduced by 8 percent and 9.2 percent for FY27E and FY28E, respectively, reflecting anticipated lower margins. The target price has been raised to ₹4,200 from ₹3,980 as the analysis is rolled forward to March 2028E, maintaining a consistent price-to-earnings (P/E) ratio of 40x.
Published on April 28, 2026
