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Supreme Industries’ (SI) Q4FY25 volume growth was 2.3% below with our estimates, due to lower volume in the plastic pipe segment (up 2.2% YoY against our est. of 5%) because of low demand in plumbing and infra segments, delay in ADD on PVC resin resulted de-stocking in the channels. EBITDA margin contracted by 260bps YoY with decrease in EBIT/kg to Rs 13.3 (down 27.8% YoY)in pipe segment mainly due to inventory losses in pipe segment. SI expects topline to reach Rs 12bn by FY26 driven by volume growth of 10-12% in pipe segment with overall EBITDA margin of 14.5-15.5%, also plastic pipe segment capacity to reach 1mn MT by FY26. We estimate FY25-27E revenue/EBITDA/PAT CAGR of 14.3%/17.7%/19.8%, with volume CAGR of 12.4% and EBITDA margin expansion of ~80bps. We have up revised our earnings estimates for FY26/FY27E by 3.8%/3.1% and revised TP to Rs3,803 (Rs3,689 earlier), based on 35x FY27E earnings. Maintain ‘Accumulate’.

Revenues remain flat, Adj. PAT declines by 17.2%: Sales remain flat at Rs 30.3bn (PLe: Rs 31.0bn) with vol. increases by 2.3% YoY to 200kMT and realization decline by 1.8% YoY. Plastic Pipe segment revenue down by 3.6% YoY to Rs 20.7bn, packaging revenue up by 11.9% YoY to Rs 4.2bn, industrial revenue down by 1.50% YoY to Rs3.5bn, consumer segment was up by 15.0% YoY to Rs1.4bn. EBITDA decline by 15.2% YoY to Rs 4.1bn (PLe: Rs3.8bn). EBITDA margin was at 13.8% (PLe:12.3%) and EBITDA per Kg reached Rs19.0/kg. In Plastic Pipes/ Packaging/ Industrial/Consumer, EBIT margins contracted by ~320/450/110/75bps YoY to 10.4%/13.5%/10.2%/16.6%.PAT stood to Rs 2.9bn (-17.2%YoY; PLe Rs2.5bn). The overall turnover of value-added products remains at Rs.12.7bn in Q4FY25 as compared to Rs 11.9bn in Q4FY24.

Con call highlights: 1) SI is targeting a topline of Rs 12bn driven by volume growth of 10–12% in the pipes segment and expects to EBITDA margins of 14.5–15.5%. 2) The company is aiming to scale its pipe segment capacity to 1mn MT by FY26, along with setting up 5,000 tons of capacity for PVC profile manufacturing. 3) The SI Plastic Pipe segment faced challenges in FY25 due to reduced government spending on infrastructure, unseasonal rainfall, and volatile PVC Resin prices, which fluctuated 14 times since July '24. While the overall plastic pipe segment volume declined by 6%, SI volume grew by 6%. 4) The acquisition of Wavin will provide the company exclusive access to Orbia Wavin’s advanced piping technologies in India and SAARC countries. It will add 73,000 MTPA capacity across three plants in Banmore, Hyderabad, and Neemrana. 5) The Composite Cylinder Division had a challenging year, with lower business from M/s Indian. However, new designs for the 14.2 Kg cylinder are in progress, and the division is expanding its customer base in the Middle East and Russia while retaining international clients. 6) The bathroom fittings division, currently having 729 SKUs, recorded robust 100% growth in FY25. The company aims to expand this to 1,000 SKUs to strengthen its product range. 7) The protective packaging segment contributed Rs 8.5bn in FY25 and expected to reach Rs 10bn by FY26. 8) The company operates eight plants, producing HDPE Pipes and Water Tanks to serve markets efficiently, also successfully launched Electrofusion Olefins and compression molded fittings, with 639 products in its portfolio, planning to add 75 in FY26. The company also introduce the PP Silent pipe system. 9) The CPVC segment volume grew by 21 % in FY25. 10) In FY26 company plans to invest Rs 11bn in capex. 11) Company reported an inventory loss of Rs 1500mn and JJM based P&F volume of 18000MT in FY25

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