SUPREMEIND - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.6
| Stock Code | SUPREMEIND | Market Cap | 48,899 Cr. | Current Price | 3,843 ₹ | High / Low | 4,740 ₹ |
| Stock P/E | 61.8 | Book Value | 398 ₹ | Dividend Yield | 0.88 % | ROCE | 23.7 % |
| ROE | 18.1 % | Face Value | 2.00 ₹ | DMA 50 | 3,802 ₹ | DMA 200 | 3,882 ₹ |
| Chg in FII Hold | -1.43 % | Chg in DII Hold | 1.16 % | PAT Qtr | 158 Cr. | PAT Prev Qtr | 193 Cr. |
| RSI | 47.8 | MACD | 46.2 | Volume | 1,11,108 | Avg Vol 1Wk | 2,00,765 |
| Low price | 3,020 ₹ | High price | 4,740 ₹ | PEG Ratio | 28.5 | Debt to equity | 0.06 |
| 52w Index | 47.9 % | Qtr Profit Var | -11.8 % | EPS | 62.2 ₹ | Industry PE | 21.2 |
SUPREMEIND (Supreme Industries Ltd) demonstrates strong operational efficiency with ROCE (23.7%) and ROE (18.1%), supported by very low debt-to-equity (0.06). However, valuations are extremely stretched (P/E 61.8 vs industry PE 21.2), and the PEG ratio (28.5) signals poor earnings growth relative to price. Recent profit decline (-11.8% QoQ) adds caution, while dividend yield (0.88%) provides limited income support.
📈 Ideal Entry Price Zone
An attractive entry zone would be between ₹3,400–₹3,600, closer to the 200 DMA (₹3,882) and below the current price (₹3,843). This range offers valuation comfort given the premium multiples.
📊 Exit Strategy / Holding Period
If already holding, investors should adopt a medium-to-long-term horizon (3–5 years). Exit strategy may be considered near ₹4,600–₹4,700 (recent highs) if earnings growth does not justify the premium valuation. Otherwise, holding is advisable for compounding returns given strong ROCE and sectoral leadership.
✅ Positive
- Strong ROCE (23.7%) and ROE (18.1%) highlight operational efficiency
- Low debt-to-equity ratio (0.06) ensures financial stability
- EPS of ₹62.2 supports earnings visibility
- DII holdings increased (+1.16%), showing domestic institutional confidence
⚠️ Limitation
- Extremely high P/E ratio (61.8) compared to industry PE (21.2)
- PEG ratio of 28.5 suggests poor earnings growth relative to valuation
- Dividend yield of 0.88% is modest
- Quarterly PAT decline (₹158 Cr vs ₹193 Cr)
📰 Company Negative News
- Quarterly profit variation shows decline (-11.8%)
- FII holdings decreased (-1.43%), signaling reduced foreign investor interest
🌟 Company Positive News
- Strong ROCE and ROE metrics highlight operational strength
- MACD positive (46.2), suggesting bullish momentum
🏦 Industry
- Plastics and industrial products sector benefits from infrastructure and consumer demand
- Industry PE (21.2) is significantly lower than SUPREMEIND’s PE, highlighting premium valuation
🔎 Conclusion
SUPREMEIND is a fundamentally strong company with excellent efficiency metrics and low debt, but trades at stretched valuations. Entry near ₹3,400–₹3,600 offers better risk-reward balance. Investors can hold for 3–5 years, with exit near ₹4,600–₹4,700 if earnings growth fails to justify the premium multiples.