SUPREMEIND Q3 FY25 earnings call.
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Revenue
₹2,488 Cr
verified against source
Revenue YoY
2%
reported change
EBITDA
₹331 Cr
latest reported figure
Source
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record provenance
Actual signal trajectory
Where this quarter sits.
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What the record says.
Supreme Industries reported a challenging Q3 FY25 with standalone revenue of INR 2,488 crore (up 2% YoY) on volume growth of 3% to 162,733 tons. Consolidated EBITDA declined 17% YoY to INR 331 crore while PAT fell 27% to INR 187 crore, impacted by inventory losses exceeding INR 100 crore in nine months due to falling PVC prices. The Packaging segment delivered strong 13% value growth, while Plastic Piping (65% revenue share) grew only 1% in value despite 4% volume growth, reflecting unfavorable product mix and PVC price deflation. Management maintained guidance for 15-16% volume growth in plastic piping for FY25, targeting Q4 volumes of 200,000+ tons requiring ~30% growth against a high base. Full-year EBITDA margin guidance stands at 13.5-14%. The company remains debt-free with INR 290 crore cash, while executing INR 1,500 crore CapEx program to expand piping capacity to 900,000 tons by FY25 year-end. Key risks include PVC price uncertainty pending anti-dumping duty decision, weak infrastructure demand (HDPE volumes down 28% in 9M), and channel de-stocking dynamics.
Colored figures show movement against the previous available record.
Guidance to track
- Management maintained full-year volume growth guidance of 15-16% for plastic piping system, requiring approximately 30% volume growth in Q4 against a high base of 41% growth in Q4 FY24. Confidence based on distributor order targets and inventory depletion at channel level.
- Full-year EBITDA margin expected in 13.5-14% range based on current PVC price stabilization and improved operational efficiency, with margin recovery expected in Q4 as inventory losses reverse.
- Brownfield expansion at various locations progressing smoothly; current capacity of 820,000 tons will reach 900,000 tons by March 2025. Three new greenfield plants at Jammu, Bihar, and MP planned for FY26 execution.
- Composite CNG cylinders developed for cascade application at CNG filling stations; commercialization likely during current quarter (Q4 FY25). Supplies against IOCL 10kg cylinder contract to be completed by February 2025.
Risks flagged
- Falling PVC prices caused inventory losses exceeding INR 100 crore in nine months. Open market prices (INR 72/kg) are significantly below domestic producer prices (INR 78.50/kg declared), creating margin pressure as company must continue purchasing from local suppliers.
- Directorate General of Trade Remedies recommended anti-dumping duty on five countries in November 2024, but Finance Ministry decision remains pending after 80+ days. This creates uncertainty on PVC price trajectory and could impact domestic pricing if duty is imposed or not imposed.
- Infrastructure demand remains non-existent with HDPE raw material consumption down 28% in first nine months across the industry. Government infrastructure spending was only 29% of budget in first half. Management acknowledged infra contribution is very low.
- Extended winter rainfall in South India and eastern states impacted agri demand in Q3. Channel partners have de-stocked significantly given falling PVC prices, creating uncertainty on restocking pace despite management confidence on Q4 recovery.
Key quotes
- The demand as it is remaining today, we are very confident. We are very confident that if no disturbance takes place, we are going to achieve the number what we are telling you.
- I don't think raw material prices are now higher than last year. What I know is that prices are higher, but the effective prices are not higher. Prices are quite low. Very competitive, very economical. Our product is very economical compared to any pipe.
- We have very good inventory pile now. We have heavy inventory with us. Inventory will be completed in this quarter.
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