Supreme Industries · Material risks, their source context, and severity in the latest available quarter.
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Risk intelligence
Management explicitly stated they cannot forecast polymer prices due to geopolitical uncertainties, wars, and crude oil volatility ($40-$75 range possible). Current price increase from $580 to $640 CIF India may reverse if crude falls.
Industrial components supplying to washing machine, refrigerator, and AC manufacturers continue to face turbulence and degrowth. Management expects improvement but no specific timeline.
Inventory of ₹1,900 crore ties up significant cash. Other income collapsed from ₹15.5 crore (Q2) to ₹3.8 crore (Q3) as surplus funds deployed in working capital rather than liquid schemes.
UBS analyst pushed management to confirm if 100-150 bps of margin compression was due to inventory losses; management confirmed and stated Q4 will see recovery only if prices remain stable. Any reversal would compress margins again.
