Analyst Meet / AGM     25-Jan-21
Conference Call
Supreme Industries
Business environment has become normal in all the segments
Supreme Industries conducted conference call on 25th January 2021 to discuss the financial results and performance of the company for the quarter ended Dec'20. Mr. M. P. Taparia- Managing Director, Mr. P.C. Somani- Chief Financial Officer (CFO) and Mr. R.J. Saboo – VP (Corporate Affairs and Company Secretary) of the company addressed the Concall.

Highlights of the Concall 

  • The company sold 111584 tonne of plastic goods and achieved net product turnover of Rs. 1766 crore during Q3FY21 against sales of 101393 tonne of plastic goods and achieved net product turnover of Rs. 1356 crore in the corresponding quarter of previous year achieving volume and product value growth of about 10 % and 30 %, respectively.  
  • The company sold 297871 tonne of plastic goods and achieved net product turnover of Rs. 4128 crore during 9MFY21 against sales of 308321 tonne and net product turnover of Rs. 4028 crore in 9MFY20 resulting volume degrowth of about 3 % and product value growth 2 %, respectively. 
  • Plastic Piping System grew 9% in volumes to 76759 tonne in Q3FY21 compared to Q3FY20 and 43% in value terms to Rs 1140 crore with 800 bps increase in OPM to 24%.  
  • Industrial Products grew 32% in volumes to 11652 tonne in Q3FY21 compared to Q3FY20 and 38% in value terms to Rs 216 crore with 200 bps increase in OPM to 13%.  
  • Packaging Products grew 2% in volumes to 16785 tonne in Q3FY21 compared to Q3FY20 and 3% in value terms to Rs 318 crore with 100 bps decrease in OPM to 16%.  
  • Consumer Products grew 11% in volumes to 6388 tonne in Q3FY21 compared to Q3FY20 and 12% in value terms to Rs 117 crore with 500 bps decrease in OPM to 23%.  
  • The overall turnover of value added products increase to Rs. 758 crore during the current quarter as compared to Rs. 568 crore in the corresponding period of previous year achieving growth of 33%. 
  • The company has cash surplus funds of Rs. 432 crore as on 31st December, 2020 as against net borrowings of Rs. 217 crore as on 31st March, 2020. 
  • Business environment has become normal in all the segments where the company is operating. 
  • The company achieved a volume growth of 10% and value growth of 31% in Q3FY21 compared to Q3FY20 supported by increase in the business of value added products. 
  • OPM increased significantly to 21.53% from 16.11% due to inventory gain on account of rapid increase in the price of PVC resins to the extent of around Rs 80 crore 
  • The crop situation in India is normal which has boosted the rural income. Rabi crop sowing is also being done in larger area than the previous year. 
  • The company enjoyed good demand of its product from rural market, tier 2 and 3 cities and from housing market also. Demand for the company's housing project has revived in the metro cities. The demand for furniture and material handling products were higher compared to previous year. The company also saw good demand for industrial products. 
  • The company's packaging segment was affected due to increase in raw material prices which could be passed over with a time lag which may happen ion Q4FY21 
  • PVC resin prices have gone up by 25% which is about Rs 23 per kg in the quarter. The company expects softening of PVC resin prices by Mar'21 
  • The company's capex plan is going smoothly along with carried forward investment commitment of Rs 182 crore. The company has made a plan to invest Rs 400 crore in FY21. The said investment is mostly in the existing plant where additional construction is going on at seven sites. The company is also putting up new plant in 3 locations. Land has already been acquired in Orissa and Tamil nadu. In Assam the plant is being constructed on a new agreement basis. The company aims to put all these plants in production in FY22 
  • The company tank business is currently supplying from 5 locations which it expects to increase it to 8 locations by Dec'21. The company is currently selling tank of Rs 15-16 crore every month. The company expects tank business has bright future. 
  • The company's installed capacity has increased from 635969 tonne at the end of 31st March 2019 to 694410 tonne in 31st of March 2020. Current capacity includes 499111 tonne of plastic piping products, 74897 tonne of industrial products, 90554 tonne of packaging products and 29848 tonne of consumer products 
  • The company expects to perform much better in Q4FY21 compared to Q4FY20.
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