Supreme Industries conducted conference call on 26 April 2024 to discuss the financial results and performance of the company for the quarter ended Mar’24. 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 195369 tonne of plastic goods and achieved net product turnover of Rs 2979 crore during Q4FY24 against sale of 147414 tonne and net product turnover of Rs 2566 crore in the corresponding quarter of previous year, achieving volume and product value growth of about 16% and 37% respectively.

• The company sold 639701 tonne of plastic goods and achieved net product turnover of Rs 10022 crore during FY24 against sale of 506501 tonne and net product turnover of Rs 9066 crore in the corresponding quarter of previous year, achieving volume and product value growth of about 26% and 11% respectively.

• Plastic pricing system business grew 34% by volume and 15% in value term on a YoY basis in Q4FY24. Packaging Product segment business grew by 8% in volume and 7% in value term. Industrial Products segment business grew by 5% in volume and degrew by 13% in value terms. Consumer Product segment business remains flat in volume and degrew by 1% in value term.

• The overall turnover of value added products increase to Rs. 3737 crore as compared to Rs. 3329 crores in the previous year achieving growth of 13%.

• The company has total cash surplus of Rs. 1178 crore as on 31st March, 2024 as against cash surplus of Rs. 738 crore as on 31st March, 2023.

• The company has plans to commit capex of about Rs. 1500 crore including carry forward commitments of Rs. 496 crore at the beginning of the year. The capex plan for brownfield expansion of capacities included new range of product across all segments. The capex plan also includes setting a plant at Kanpur in Uttar Pradesh, Patna in Bihar, Vijayawada in Andhra Pradesh, and near JNPT Port in Maharashtra. Entire capex shall be funded from internal accrual.

• Central and State Governments are taking several initiatives towards creating improved infrastructure, to provide houses for all and supplying gas to households by Piping system will further boost the demand for the Company’s products.

• In India and several surrounding countries, expansion of plastic raw material production capacity is under execution. In the forecasted slow growth of world economy in this year combined with increased availability of plastics will maintain the price level at affordable price level. The company expects to achieve 20% volume growth this year.

• The company achieved volume growth of about 33% in plastic piping system made from different plastic materials. Overall, the Company sold 501001 tonne of pipe system compared to 375046 tonne in the preceding year. However due to reduction in PVC resin prices, revenue growth was at about 15% over previous year.

• The company entire range of plastics products are poised to grow in this year. The company is also taking several initiatives to boost export of plastics products out of its product range.

• The Company has 36 plastic piping Systems in the division and plans to add another 5 new systems viz. Acoustic PP Pipe System in collaboration with Poloplast GmbH of Austria, Polyethylene Gas Piping System, PERT Piping System, PE single wall corrugated Pipes, and Rainwater Harvesting System (Infiltration modules for ground recharge and storage) during the current year.

• Bath fittings and Sanitaryware business has been established. Design center at Pune is working extensively for various new SKUs. Based on their initiatives, the SKU in this division will go up from 421 to over 1000 by the end of this year.

• The company is putting up PVC profile manufacturing with 5000 tonne annual capacity at newly acquired site at Kanpur Dehat along with Window making at the same site and also at Kharagpur.

• The Business of Cross Laminated Film (XF) & Products had a nominal growth of 1 % in volume terms during the year under review. The below normal & erratic rains in several parts of the country adversely impacted the demand for tarpaulin resulting in de-growth in this product category. Company has introduced many new made-up products from XF film and was successful in acquiring customers by entering in additional world markets. Exports grew by 9 % over the previous year with a presence in 35 countries across the globe.

• All the equipment’s for manufacturing Cross Plastics are in the final stages of installation & the trial production is likely to commence in 2nd Quarter 2024. Once the samples are approved by prospective customers the company will launch this much awaited product in the market.

• The Company’s furniture business did not show any growth in value terms and a negligible growth in volume terms in line with the trend witnessed by overall plastic furniture industry.

• Industrial Component division did not grow due to sluggish demand from appliances / white goods sector where Company has significant presence. Auto sector continued to look promising.

• The Material Handling division grew 11% by volume and 3% value for the year. Sectors like automobile, engineering performed very well whereas FMCG, whitegoods, E Commerce companies stagnated due to higher inflation and price rise in essentials.

• The year under review remained subdued for composite cylinder division as purchases from its major customer IOCL has not happened as projected earlier. Discussion with other OMCs is also continuing as they are exploring to introduce composite Cylinders in their portfolio.

• The Protective Packaging Division is putting its continuous efforts to remain in business growth path which resulted in growth 15% in Volume and about 12% in Value terms.

• Current nameplate capacity as on 31st March 2024 is 950,000 tonne, which consists of 739,000 of plastic piping, 90,000 metric tonnes of industrial product, 93,000 of packaging products and 29,000 of consumer products. The company expects capacities to incrase around 10,50,000 tonne by end of FY25. The majority of the capex will be in plastic piping. So the present capacity of 740,000 of plastic piping will go up to 835,000 tonne.