Shares of Supreme Industries jumped over 4% to ₹6,264 on July 10 after Jefferies upgraded the stock to ‘Buy’ and raised the target price to ₹6,700, suggesting a 7% upside from current levels. This upgrade followed a 22% year-on-year volume growth in April-May.
Key Points:
- Strong Performance: The stock has surged over 37% this year, outperforming the Nifty 50’s 12% rise. It reached a 52-week high of ₹6,482 on June 12, 2024.
- Positive Outlook: Jefferies sees Supreme Industries as a strong player in housing, capex, and agriculture, estimating a 25% annual growth rate in earnings per share (EPS) from FY24 to FY27.
- Sales and Margins: Despite a 12% year-on-year sales growth impacted by PVC volatility, the company focuses on value-added sales to boost margins.
- Expansion Plans: Supreme Industries plans to grow its volume by 20% year-on-year in FY25 and add three new greenfield sites to its expansion plan.
- Recent Performance: In the first two months of FY25, sales, including other income, grew by 11.9% year-on-year, with volume growth of 22% and plastic pipe systems up by 25%.
Conclusion:
Supreme Industries continues to show strong growth and positive future prospects, making it an attractive investment following Jefferies’ upgrade.
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