Cholamandalam Securities is bullish on Supreme Industries has recommended buy rating on the stock with a target price of Rs 1147 in its research report dated May 08, 2019.
Cholamandalam Securities' research report on Supreme Industries
Consolidated revenue stood at INR 15.3bn (+4% YoY & +9% QoQ) in 4QFY19. During the quarter, plastic goods volume stood at 114,009 MT, up 11% YoY and realization fell by 3% YoY to INR 130,428/MT. In 4QFY19, Plastic piping segment volume grew by 14.7% YoY to 83,476 MT and revenue grew by 13.7% YoY to INR 9,430mn. Protective packaging segment volume grew 13.6% YoY to 13,527MT and revenue grew 8.3% YoY to INR 2,670mn. Industrial product segment volumes de-grew by 13.4% YoY to 10,90 MT and revenue fell by 20.3% YoY to INR 2,040mn. Consumer product segment volume grew 3.2% YoY to 5,404MT and revenue was flat YoY at INR 960mn.
Outlook
At CMP of INR 1021, the stock is trading at 24.8XFY20E and 21.3XFY21E earnings. We are valuing the company on a SOTP basis (SI core business is valued at 20XFY21EPS and Supreme Petrochemicals stake at 20% discount to the market value) to arrive at a target price of INR 1,147 and maintain BUY rating.
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