SUPREMEIND - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.0
| Stock Code | SUPREMEIND | Market Cap | 44,318 Cr. | Current Price | 3,487 ₹ | High / Low | 4,740 ₹ |
| Stock P/E | 56.0 | Book Value | 398 ₹ | Dividend Yield | 0.98 % | ROCE | 23.7 % |
| ROE | 18.1 % | Face Value | 2.00 ₹ | DMA 50 | 3,521 ₹ | DMA 200 | 3,881 ₹ |
| Chg in FII Hold | -1.43 % | Chg in DII Hold | 1.16 % | PAT Qtr | 158 Cr. | PAT Prev Qtr | 193 Cr. |
| RSI | 51.7 | MACD | 10.4 | Volume | 85,438 | Avg Vol 1Wk | 2,69,903 |
| Low price | 3,020 ₹ | High price | 4,740 ₹ | PEG Ratio | 25.8 | Debt to equity | 0.06 |
| 52w Index | 27.2 % | Qtr Profit Var | -11.8 % | EPS | 62.2 ₹ | Industry PE | 21.5 |
💰 Financials: Supreme Industries (SUPREMEIND) demonstrates strong fundamentals with ROE at 18.1% and ROCE at 23.7%, reflecting efficient capital usage and profitability. Debt-to-equity ratio of 0.06 highlights a virtually debt-free balance sheet, ensuring financial stability. Quarterly PAT declined from ₹193 Cr. to ₹158 Cr., showing short-term earnings pressure. Cash flows remain robust, supported by diversified operations in plastics, packaging, and industrial products.
📊 Valuation: Current P/E of 56.0 is significantly above the industry average of 21.5, suggesting stretched valuation. P/B ratio (~8.7) is high relative to book value of ₹398, indicating expensive pricing. PEG ratio of 25.8 signals overvaluation compared to growth prospects. Intrinsic value analysis suggests the stock is trading at a premium, requiring caution for new entries.
🏭 Business Model & Competitive Advantage: Supreme Industries is a leading player in plastic products, with a diversified portfolio across consumer goods, industrial applications, and packaging. Its competitive advantage lies in scale, brand recognition, and wide distribution network. The company benefits from India’s infrastructure and consumer demand growth, though margins remain sensitive to raw material price fluctuations.
📈 Entry Zone: Considering DMA 50 (₹3,521) and DMA 200 (₹3,881), accumulation is attractive in the ₹3,200–₹3,350 range. Long-term investors can hold for steady compounding returns, supported by strong fundamentals and sector growth, but should be mindful of premium valuations.
Positive
- Strong ROCE (23.7%) and ROE (18.1%) indicate efficient operations.
- Low debt-to-equity ratio (0.06) ensures financial stability.
- Diversified product portfolio across plastics and packaging.
- Strong brand recognition and wide distribution network.
Limitation
- High P/E (56.0) compared to industry average (21.5).
- P/B ratio (~8.7) suggests expensive valuation.
- PEG ratio of 25.8 signals overvaluation relative to growth.
- Quarterly PAT decline from ₹193 Cr. to ₹158 Cr.
Company Negative News
- Decline in FII holdings (-1.43%).
- Sequential profit decline raises short-term concerns.
Company Positive News
- Increase in DII holdings (+1.16%), signaling domestic institutional confidence.
- Strong long-term fundamentals supported by diversified operations.
Industry
- Plastics and packaging industry P/E at 21.5 indicates Supreme Industries trades at a premium.
- Sector growth driven by infrastructure, consumer demand, and industrial applications.
- Raw material cost volatility remains a key risk factor.
Conclusion
🔑 Supreme Industries is a fundamentally strong company with efficient returns, low debt, and diversified operations. However, stretched valuations and profit decline limit near-term attractiveness. Entry around ₹3,200–₹3,350 offers a favorable risk-reward balance. Long-term holding is justified for investors seeking exposure to India’s plastics and packaging growth story, but caution is advised due to premium pricing.
I can also prepare a comparative HTML snapshot against peers like Astral and Finolex Industries to highlight Supreme Industries’ relative valuation and efficiency.