Supreme Industries Ltd - Apr 2025 Earnings Call Transcript Analysis

April 30, 2025 · 4 min read

Earnings Call Transcript Analysis Report #

Net Product Turnover: Rs. 10,295 Crores (FY25) vs. Rs. 10,022 Crores (FY24), a 3% increase.
Plastic Goods Sales Volume: 674,510 MT (FY25) vs. 639,701 MT (FY24), a 5% increase.
Consolidated Operating Profit: Rs. 1,552 Crores (FY25) vs. Rs. 1,654 Crores (FY24), a 6% decrease.
Consolidated Profit After Tax: Rs. 961 Crores (FY25) vs. Rs. 1,070 Crores (FY24), a 10% decrease.
Value Added Products Turnover: Rs. 4,060 Crores (FY25) vs. Rs. 3,748 Crores (FY24), an 8% increase.
Inventory Loss (FY25): Estimated at “not be less than INR150 crores” due to falling polymer prices, particularly PVC.
Tax Rate (FY25 Consolidated): Approximately 22.4%. Q4 FY25 tax rate was 20%, influenced by dividend income which is exempt.

Operating profit and PAT declined year-over-year despite volume and turnover growth, primarily attributed to PVC price volatility and lower government spending.
Q4 FY25 other expenses were Rs. 347 crores, lower Q-o-Q and Y-o-Y, attributed to controlled advertisement expenses, especially in the plastic piping system.

Overall Turnover: Anticipated “around 12,000 crores this year.”
Plastic Piping System Volume Growth: Expects to grow “3% to 4% more than the country’s growth.” Country growth is anticipated at 7-8%, implying 10-12% growth. This includes 9 months contribution from Wavin.
Overall Volume Growth: “Similar range” to piping, i.e., 10-12%.
EBITDA Margin: Projected “Between 14.5% to 15.5%” for the consolidated entity.
Tax Rate (FY26): “Fiscal ‘26 is very difficult to predict that way. But nothing unusual.”

Growth:
- Plastic Piping System: +6% volume, +2% value.
- Packaging Product Segment: +10% volume, +13% value.
Decline/Flat:
- Industrial Products Segment: -1% volume, flat value. (Partially due to non-recurring EVM business in previous year).
- Consumer Product Segment: -3% volume, +1% value.
CPVC business saw 21% volume growth for the full year FY25.

Wavin India Acquisition: Signed MOU with Orbia Advance Corporation S.A.B. de CV to acquire Orbia Wavin’s pipes and fittings business in India. This will add 73,000 MT per annum capacity from three sites (Banmore, Hyderabad, Neemrana) and provide exclusive access to Wavin’s piping technologies for India and SAARC. The acquisition is expected to conclude by end of June, with Wavin under Supreme from July onwards. Cost: “$30 million dollar and plus whatever working capital they have.”
Capex Plan (FY26): Rs. 1,100 Crores, including Wavin acquisition, new plant at Kanpur Dehat (PVC profile and window), PP silent piping at Gadegaon, and capacity increases for OPVC, CPVC, and fittings. To be funded from internal accruals.

Plans to add five more systems in the Plastic Piping division.
PVC Profile manufacturing (5,000 tons annual capacity) and window making facility at Kanpur Dehat, with sales expected from July 2025.
Cross Plastics: Trial production underway.
Furniture: Launching eight new models in Q1 FY26, focusing on Almirah range.
Composite Cylinders: Obtained certifications for high-pressure Type IV CNG cylinders.

Capacity Expansion: Plastic Piping System capacity reached ~870,000 MTPA (Mar'25) from 740,000 MTPA (Mar'24), aiming for 1 million MTPA by end of FY26 (inclusive of Wavin). Non-pipe segment capacity as of Mar'25: Industrial 91,000 MT, Packaging 101,000 MT, Consumer 27,000 MT.
Deferred Greenfield Projects: Plans for plants in Patna and Jammu are deferred pending industrial policy announcements and land allotment.

Kanpur Dehat plant for PVC profiles and windows is in “full swing.”
Cross Plastics equipment installed, trial production underway.
OPVC lines from Molecor (Spain) being installed progressively, with orders extending up to 2028.

FY25 saw challenges for Plastic Pipe Systems: “principally due to much lower spending by Central and State Governments on infrastructure… unseasonal rainfall… and extreme volatile situation of PVC Resin prices.”
PVC prices changed 14 times since July'24, impacting the industry.
IMD forecast for above-normal rainfall in FY26 is seen as positive for crop production and inflation.
Crude prices expected to be range-bound ($65-70/barrel), potentially stabilizing polymer prices.
Plastic Piping Systems industry saw a de-growth of about 6% in volume in FY25.
Demand for plastic furniture is witnessing “a stagnancy.”
Automotive (Commercial Vehicles) showed muted demand, Passenger Vehicles better. Appliances (AC, Coolers) good growth, Washing Machines subdued.

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