SUPREMEIND - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 3.7

📊 Core Financials Overview

Profitability

ROE of 18.1% and ROCE of 23.7% reflect strong capital efficiency and operational performance.

EPS of ₹66.0 supports solid earnings, but the P/E of 67.8 is nearly 3× the industry average (23.6), indicating a stretched valuation.

PAT declined from ₹262 Cr to ₹177 Cr QoQ, a −24.9% drop, suggesting margin pressure or seasonal weakness.

Balance Sheet Strength

Debt-to-equity ratio of 0.02 — virtually debt-free, a major strength.

Book Value of ₹393 vs Current Price ₹4,475 → P/B ratio ~11.4, reflecting aggressive pricing.

Dividend Yield of 0.76% adds modest income appeal.

Cash Flow & Stability

PEG ratio of 31.2 is extremely high, signaling overvaluation relative to earnings growth.

RSI at 50.8 and MACD positive suggest neutral-to-mild bullish momentum, though volume is below average.

📉 Valuation Metrics

Metric Value Insight

P/E Ratio 67.8 Significantly overvalued

P/B Ratio ~11.4 Premium pricing

PEG Ratio 31.2 Indicates stretched valuation

Intrinsic Value ~₹3,800–₹4,000 Estimated below current price

Supreme Industries appears overvalued, especially given the recent earnings decline and elevated PEG ratio.

🏭 Business Model & Competitive Edge

Sector: Supreme Industries Ltd is a leading manufacturer of plastic products, including piping systems, furniture, packaging, and industrial components.

Strengths

Diversified product portfolio across high-growth segments

Strong brand and distribution network

Near-zero debt and consistent dividend payout

Challenges

High valuation multiples

Declining quarterly profits

FII holding dropped (−1.00%), though DII interest rose (+1.34%)

According to TopStockResearch, the company maintains strong operating margins and has a solid long-term growth trajectory, but current pricing may not offer a favorable entry.

📌 Entry Zone Recommendation

Suggested Entry Range: ₹3,800–₹4,000

Below 200 DMA (₹4,256) and closer to intrinsic value

RSI and MACD suggest waiting for technical confirmation before entry

🧭 Long-Term Holding Guidance

Hold if Already Invested: Strong fundamentals and sector leadership support long-term compounding.

Accumulate on Dips: Especially near ₹3,800 for better margin of safety.

Watchlist Triggers

EPS recovery and margin expansion

Institutional accumulation

Volume breakout and technical support

Supreme Industries is a high-quality industrial play with excellent fundamentals, but its valuation calls for patience and precision. You can explore more on Dhan’s stock analysis page

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or Trendlyne’s dashboard

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1

dhan.co

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trendlyne.com

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