Supreme Industries · Material risks, their source context, and severity in the latest available quarter.
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Risk intelligence
EBITDA per kg has fallen from INR 27/kg in FY23 to INR 22.8/kg in Q4 FY24. Dealers report Supreme Industries cutting prices to gain volumes. This conscious trade-off of margins for market share could pressure profitability if competition intensifies further.
Management explicitly stated Jal Jeelan Mission will be 'over in the next two years' with current run-rate of INR 400 crore revenue from this scheme. While gas piping identified as replacement, the transition may cause volume volatility.
CPVC prices have declined 4-6 per kg with too many players and excess capacity in the market. While Supreme has no supply constraint, realization growth in this segment has stalled. Management acknowledged margin pressure in plumbing applications.
Full year FY24 inventory loss of INR 50 crore (INR 51 crore loss on stock valuation vs prior year) created INR 1 per kg headwind. If raw material prices remain volatile, similar losses could recur in FY25, pressuring margins.
