SUPREMEIND - Supreme Inds.

📊 NSE: SUPREMEIND 🏢 Plastics Products 📅 Last Updated: 12/14/2025 13:54

💰 Financial Performance

Revenue Growth by Segment

Piping systems grew to 69% of revenue in FY24 (up from 66% in FY23). Industrial goods contributed 14%, Packaging products 13%, and Consumer goods 4%. Overall revenue for H1 FY26 reached INR 5,003 Cr, a 2% YoY increase, while Q2 FY26 revenue was INR 2,394 Cr, up 5% YoY.

Geographic Revenue Split

Not disclosed in available documents, though the company operates 30 plants across India to reduce freight costs and lead times.

Profitability Margins

Operating margins stood at 15.7% in FY24, a 60 bps reduction from FY23 due to PVC price volatility. For H1 FY26, EBITDA margins fell to 12.3% (INR 617 Cr) from 14.5% in the previous year. Management targets an annual operating margin of 14.5% to 15% for FY26.

EBITDA Margin

EBITDA for H1 FY26 was INR 617 Cr, down 13% YoY. Q2 FY26 EBITDA was INR 297 Cr, a 7% YoY decline. The margin compression is attributed to inventory losses and lower realizations despite an 8% YoY growth in sales volume to 338,224 MT in H1 FY26.

Capital Expenditure

Planned capex for FY26 is approximately INR 1,300 Cr, with INR 869 Cr already spent in H1 FY26. Historical capex includes INR 700-800 Cr in FY24 plus INR 150 Cr for the acquisition of Parvati Agro Plast Ltd.

Credit Rating & Borrowing

Maintains a strong credit profile with 'nil' long-term debt. Liquidity is supported by bank lines of INR 1,471 Cr (utilized at 47%) and a net cash surplus of INR 49 Cr as of September 30, 2025.

⚙️ Operational Drivers

Raw Materials

Polyvinyl Chloride (PVC) and other plastic polymers are the primary raw materials. PVC price volatility significantly impacts margins, as seen in the 60 bps margin reduction in FY24 and inventory losses of INR 180 Cr in FY23.

Capacity Expansion

Current installed capacity is approximately 9.5 lakh MT (FY24), expanding to 10.73 lakh MT by March 2025. Recent expansions include greenfield plants in Assam, Tamil Nadu, and Odisha, and the acquisition of Parvati Agro Plast (36,000 MTPA).

Raw Material Costs

Raw material costs are highly volatile; the company experienced inventory losses of INR 40 Cr in H1 FY24 and INR 180 Cr in FY23. Supreme manages this through a price pass-through mechanism to customers.

Manufacturing Efficiency

The company operates 30 plants nationwide to minimize freight costs. Volume growth was 26% in FY24 and 8% in H1 FY26, indicating high capacity utilization despite realization pressures.

Logistics & Distribution

Distribution is handled through a massive network of 5,753 distributors. The decentralized manufacturing strategy (30 plants) is specifically designed to reduce logistics costs as a percentage of revenue.

📈 Strategic Growth

Expected Growth Rate

9-10%

Growth Strategy

Growth is driven by a INR 1,300 Cr capex plan for FY26, focusing on new segments like window profiles (INR 200 Cr investment) and silent pipe systems (INR 80 Cr). The company is also integrating Wavin's operations, expecting regular margins from November 2025, and targeting a total turnover of INR 11,000 to 11,500 Cr for FY26.

Products & Services

Piping systems, cross-laminated films, protective packaging, industrial moulded components, moulded furniture, storage and material handling products, performance packaging films, composite LPG cylinders, and window profiles.

Brand Portfolio

Supreme, Wavin (acquired/licensed), Parvati Agro Plast.

New Products/Services

New product launches include window profiles and silent pipe systems. Value-added products now contribute ~40% of total revenue, up from 36% in FY23, supporting higher overall profitability.

Market Expansion

Expansion into new regions via greenfield plants in Assam, Tamil Nadu, and Odisha. The company is also scaling its distribution network, which grew from 4,300 to 5,753 distributors within two years.

Market Share & Ranking

Supreme is India's leading processor of plastic with a healthy market position across all four business segments.

Strategic Alliances

Maintains a 30.78% stake in associate company Supreme Petrochem Ltd and a collaboration with international manufacturers for product development.

🌍 External Factors

Industry Trends

The industry is seeing increased usage of plastic products in households and growth in the real estate sector. Supreme is positioning itself by shifting toward value-added products (40% share) and expanding capacity to 1.07 million MTPA.

Competitive Landscape

Faces intense competition from both organized and unorganized players in the plastic processing industry, particularly in the piping and consumer goods segments.

Competitive Moat

Moat is built on a massive distribution network (5,753 distributors), 30 manufacturing plants providing logistical advantages, and a high share of value-added products. These factors provide cost leadership and high switching costs in the B2B piping segment.

Macro Economic Sensitivity

Highly sensitive to GDP growth, real estate cycles, and government-led agricultural initiatives. Extended monsoons in H1 FY25 led to a moderation in operating performance.

Consumer Behavior

Increasing consumer preference for branded, high-quality plastic furniture and advanced piping solutions for real estate.

Geopolitical Risks

Exposure to global raw material price volatility (PVC) which is influenced by international crude and petrochemical trends.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to environmental and manufacturing standards for plastic processing. The company must comply with various local regulations across its 30 plant locations.

Environmental Compliance

Supreme is committed to ESG principles, with 50% of the board comprising independent directors and a split between the Chairman and CEO roles.

Taxation Policy Impact

The company maintains a policy of prompt payment of applicable taxes. A recent notice regarding tax compliance was received, but the company emphasized its commitment to high standards.

Legal Contingencies

The company received a notice regarding tax compliance (details in Annexure A of the announcement), but specific case values in INR were not disclosed in the provided text.

⚠️ Risk Analysis

Key Uncertainties

Volatility in raw material prices (PVC) can lead to significant inventory losses (e.g., INR 180 Cr). Demand is also subject to monsoon variability affecting the agricultural segment.

Geographic Concentration Risk

Low geographic risk due to 30 plants spread across India, including recent additions in the North-East (Assam), South (Tamil Nadu), and East (Odisha).

Technology Obsolescence Risk

The company mitigates technology risk through international collaborations and investments in new product lines like silent pipes and window profiles.