SUPREMEIND - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 3.5

📊 Fundamental & Valuation Analysis

Supreme Industries Ltd is a high-quality business with strong profitability and near-zero debt, but its current valuation is stretched

P/E Ratio: 61.8 vs Industry PE of 26.4 — significantly overvalued

PEG Ratio: -44.8 — negative due to declining earnings growth, a red flag

Price to Book: ~9.7 — expensive relative to book value

ROE / ROCE: 17.1% / 22.0% — excellent capital efficiency

Dividend Yield: 0.79% — modest, not a major income play

Debt to Equity: 0.01 — virtually debt-free, a major plus

Despite strong fundamentals, the valuation metrics and recent earnings contraction suggest caution.

📉 Technical & Trend Analysis

Current Price: ₹4,325

DMA 50 / DMA 200: ₹4,175 / ₹4,179 — trading slightly above averages

RSI: 56.6 — neutral to mildly bullish

MACD: 3.43 — positive momentum

Volume: Below 1-week average — declining interest

The stock has corrected ~24% from its 52-week high of ₹5,724, but is still not in a deep value zone.

✅ Ideal Entry Price Zone

Based on valuation and technical indicators, the ideal entry zone would be

₹3,600–₹3,900 range

This aligns with historical support and offers better risk-reward

Wait for RSI to dip below 45 and MACD to flatten for a safer entry

📈 Long-Term Holding Strategy

If you already hold the stock

Holding Period: 3–5 years minimum, given strong ROCE and expansion plans

Exit Strategy

Partial exit near ₹5,100–₹5,300 if valuation overheats again

Full exit if ROE/ROCE deteriorates or PEG remains negative for multiple quarters

Reassess if quarterly PAT continues to decline (currently down 26%)

🔍 Summary

Metric Value Verdict

ROE / ROCE 17.1% / 22.0% Excellent

PEG Ratio -44.8 Concerning

Dividend Yield 0.79% Modest

Debt to Equity 0.01 Outstanding

RSI / MACD 56.6 / 3.43 Neutral / Bullish

PAT Trend -26.0% QoQ Weakening

Supreme Industries is a durable compounder, but not a value buy at current levels. Long-term investors should hold with patience or wait for a better entry point.

Would you like a side-by-side comparison with Astral or Finolex to see how Supreme stacks up in the plastic piping segment?

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