SUPREMEIND - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 4.0
| Stock Code | SUPREMEIND | Market Cap | 45,979 Cr. | Current Price | 3,620 ₹ | High / Low | 4,740 ₹ |
| Stock P/E | 50.4 | Book Value | 429 ₹ | Dividend Yield | 0.94 % | ROCE | 23.2 % |
| ROE | 17.5 % | Face Value | 2.00 ₹ | DMA 50 | 3,738 ₹ | DMA 200 | 3,843 ₹ |
| Chg in FII Hold | -2.11 % | Chg in DII Hold | 2.02 % | PAT Qtr | 382 Cr. | PAT Prev Qtr | 158 Cr. |
| RSI | 40.8 | MACD | -44.6 | Volume | 1,52,821 | Avg Vol 1Wk | 3,48,340 |
| Low price | 3,182 ₹ | High price | 4,740 ₹ | PEG Ratio | 7.28 | Debt to equity | 0.02 |
| 52w Index | 28.1 % | Qtr Profit Var | 46.1 % | EPS | 71.7 ₹ | Industry PE | 22.6 |
📊 Analysis: Supreme Industries (SUPREMEIND) has a market cap of ₹45,979 Cr and trades at a high P/E of 50.4 compared to the industry average of 22.6, indicating premium valuation. Strong ROCE (23.2%) and ROE (17.5%) highlight efficient capital use, while EPS of ₹71.7 supports earnings strength. Dividend yield of 0.94% adds modest income stability. Debt-to-equity ratio of 0.02 reflects excellent financial health. However, PEG ratio of 7.28 suggests growth is not keeping pace with valuation. PAT surged to ₹382 Cr from ₹158 Cr, showing strong quarterly performance. Current price (₹3,620) is below DMA 50 (₹3,738) and DMA 200 (₹3,843), indicating weakness but offering potential value entry.
💰 Entry Price Zone: Ideal accumulation range is ₹3,200–3,500, closer to the 52-week low (₹3,182). This zone provides better risk-reward given stretched valuations.
📈 Exit / Holding Strategy: If already holding, maintain a long-term horizon (3–5 years) given strong ROCE, ROE, and low debt. Consider partial profit booking near ₹4,600–4,700 resistance levels. Retain core holdings for compounding growth, but monitor valuation risks closely.
✅ Positive
- Strong ROCE (23.2%) and ROE (17.5%)
- Low debt-to-equity ratio (0.02)
- Quarterly PAT growth (+46.1%)
- EPS (₹71.7) supports earnings strength
- DII holdings increased (+2.02%)
⚠️ Limitation
- High P/E (50.4) vs industry average (22.6)
- PEG ratio (7.28) signals weak growth valuation
- Dividend yield (0.94%) is modest
- Stock trading below DMA averages shows weak momentum
📉 Company Negative News
- FII holdings declined (-2.11%)
- Valuation stretched compared to peers
📈 Company Positive News
- Quarterly PAT surged to ₹382 Cr from ₹158 Cr
- DII holdings increased (+2.02%) showing domestic investor confidence
🏦 Industry
- Plastics & industrial products sector trades at P/E of 22.6, much lower than Supreme Industries’ valuation
- Industry growth supported by infrastructure demand and manufacturing expansion
🔎 Conclusion
Supreme Industries is a strong candidate for long-term investment, backed by excellent ROCE, ROE, and low debt. However, valuations are stretched with a high P/E and PEG ratio. Entry around ₹3,200–3,500 is preferable. Long-term holders should stay invested for 3–5 years, booking profits near resistance levels while retaining core positions for compounding growth.