X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2018 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Supreme Inds: Robust growth in topline - Views on News from Equitymaster
MidCapSelect
  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Supreme Inds: Robust growth in topline
Feb 1, 2012

Supreme Industries declared the results for the second quarter of financial year 2012 (2QFY12). The company reported 31.5% YoY growth in sales and 42.6% YoY growth in net profit during the quarter. Here is our analysis of the result.

Performance summary
  • Net sales recorded a growth of 31.5% YoY in December quarter.
  • Operating profits jump by 47.6% YoY in the quarter. For half year period, operating profit was up by 20%.
  • Operating margins expanded by nearly 2% YoY during the second quarter.
  • Net profits increased by 42.6% for the quarter ended December 2011. For half year ended December, net profits were up by 5.2%.
  • Supreme Industries proposed an interim dividend of Rs 1.5 per share on face value of Rs 2 per share (dividend yield of 0.8%).

Financial performance snapshot
(Rs m) 2QFY11 2QFY12 Change 1HFY11 1HFY12 Change
Net sales 5,853 7,697 31.5% 10,587 12,709 20.0%
Expenditure 5,037 6,494 28.9% 8,990 10,795 20.1%
Operating profit (EBDITA) 816 1,203 47.6% 1,598 1,914 19.8%
EBDITA margin (%) 13.9% 15.6% 1.7% 15.1% 15.1%  
Other income 0 11 2688.3% 32 21 -35.5%
Interest 105 142 35.6% 173 275 59.1%
Depreciation & amortisation 151 171 12.8% 294 342 16.3%
Profit before tax 560 902 61.1% 1,163 1,318 13.3%
Tax 200 288 43.8% 400 425 6.3%
Profit after tax before minority 360 615 70.8% 763 893 17.0%
Share of associates (56) 22   -110 -26  
Profit after tax 416 593 42.6% 873 918 5.2%
Net profit margin (%) 7.1% 7.7%   8.2% 7.2%  
No. of shares (m)         127.0  
Diluted earnings per share (Rs)*         15.77  
P/E (x)         11.37  
(*trailing twelve month earnings)

What has driven performance in 2QFY12?
  • Top line grew by 31.5% YoY during the quarter. This was mainly led by 24% YoY growth in mainstream business of plastics. Revenues from construction were Rs 484 m as against Rs 41 m in the same period last year.

  • The raw material expenses were up by 27% YoY and those for employees by 21% YoY. Overall the operating expenses increased by 28.9% YoY during the quarter.

    (% of sales) 2QFY11 2QFY12 Change 1HFY11 1HFY12 Change
    Increase / Decrease in stock in trade -151 -44 -70.6% -662 -584 -11.7%
    Raw materials consumed 3746 4975 32.8% 7,141 8,636 20.9%
    Staff cost 222 268 20.7% 428 520 21.5%
    Other expenses 1220 1295 6.1% 2,083 2,223 6.7%
    Total expeneses 5037 6494 28.9% 8990 10795 20.1%

  • The operating profits jumped by 47.6% mainly on account of robust growth in the topline. For half year period, operating profits were up by 20% YoY.

  • Lower depreciation charges that grew by 13% YoY along with controlled interest costs led to a net income growth of 42.6% during the December quarter. In first quarter , interest costs had almost doubled over the previous year's number.

  • For the half year period, net profits were up by 5.2%. This implies an impressive performance during 2Q FY12.
What to expect?
At CMP of Rs 179, the stock is trading at nearly 7 times our FY14 expected earnings. The company's focus is more and more towards sales of value added products. Such products currently account for nearly 32% of the company's total sales. With the same objective in mind, Supreme Industries exited the business of plastic mats this quarter. The expansion plans though a little affected by economic scenario are on track. The plastics company is expected to incur a capital expenditure of around Rs 2 bn annually. Taking all the above into consideration, we maintain our Hold view on the stock.

To Read the Full Story, Subscribe or Sign In


Small Investments
BIG Returns

Zero To Millions Guide 2018
Get our special report, Zero To Millions
(2018 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

SUPREME INDUSTRIES SHARE PRICE


Feb 23, 2018 (Close)

TRACK SUPREME INDUSTRIES

  • Track your investment in SUPREME INDUSTRIES with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks

MORE ON SUPREME INDUSTRIES

SUPREME INDUSTRIES 5-YR ANALYSIS

COMPARE SUPREME INDUSTRIES WITH

MARKET STATS