Check Before You Invest : Supreme Petrochem Ltd

Q: Which industry/sub-sector does Supreme Petrochem Ltd belong to?

Supreme Petrochem Ltd belongs to the Oil & Gas sector, operating specifically within the Petrochemicals segment.

Q: Is Supreme Petrochem Ltd a good quality company?

Supreme Petrochem Ltd is a good quality company, based on a consistently good multi-year financial track record. This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q: Is Supreme Petrochem Ltd undervalued or overvalued?

Supreme Petrochem Ltd appears Overvalued, as its key valuation ratios are higher than their past averages. Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more. Valuation Ratios. Price to Earnings, Current: 42.21, Historic Median: 25.92. Price to Book, Current: -, Historic Median: 5.51. Price to Sales, Current: 2.58, Historic Median: 1.94. EV to EBITDA, Current: 23.86, Historic Median: 16.20

Q: Is Supreme Petrochem Ltd a good buy now?

Supreme Petrochem Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Q: Gross Profit margin of Supreme Petrochem Ltd?

Supreme Petrochem Ltd Gross profit margin which is the profit after deduction of direct costs, is 6.4% for FY-2010, which is above its 5-year median of 3.7%, indicating increasing margins.

Q: Operating Profit Margin of Supreme Petrochem Ltd?

Supreme Petrochem Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 7.67% for FY-2010, which is above its 5-year median of 4.83% indicating increasing margins.

Q: Net Profit Margin of Supreme Petrochem Ltd?

Supreme Petrochem Ltd Net Profit Margin is 3.76% for FY-2010, is above its 5-year median of 1.54%, indicating increasing margins. Profitability Metrics. Gross Profit Margin (%), Current: 6.4, Historic Median: 3.7. Operating Profit Margin (%), Current: 7.67, Historic Median: 4.83. Net Profit Margin (%), Current: 3.76, Historic Median: 1.54

Q: Return on Asset of Supreme Petrochem Ltd?

Supreme Petrochem Ltd Return on Asset is 8.54%, which is above its 5-year historical median of 4.01%, indicating improved asset utilization efficiency.

Q: Return on capital employed (ROCE) of Supreme Petrochem Ltd?

Supreme Petrochem Ltd Return on capital employed is 29.85% for FY-2010, which is above its 5-year historical median of 17.08%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q: Return on Equity (ROE) of Supreme Petrochem Ltd?

Supreme Petrochem Ltd Return on equity is 28.08% for FY-2010, which is above its 5-year historical median of 12.73%, indicating the business is making better use of its shareholders capital.

Check Before You Invest : Supreme Petrochem Ltd

BSE: 500405 NSE: SPLPETRO ISIN: INE663A01033

| Sector: Oil & Gas | Industry: Petrochemicals

Snapshot

Q.1 Which industry/sub-sector does Supreme Petrochem Ltd belong to?

Supreme Petrochem Ltd belongs to the Oil & Gas sector, operating specifically within the Petrochemicals segment.

Q.2 Is Supreme Petrochem Ltd a good quality company?

Supreme Petrochem Ltd is a good quality company, based on a consistently good multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Supreme Petrochem Ltd undervalued or overvalued?

Supreme Petrochem Ltd appears Overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios	Current	5-year Historic Median
Price to Earnings	42.21	25.92
Price to Book	-	5.51
Price to Sales	2.58	1.94
EV to EBITDA	23.86	16.20

Q.4 Is Supreme Petrochem Ltd a good buy now?

Supreme Petrochem Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

How has it performed on generating Profits?
By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.
How efficiently has it utilized Capital?
By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.
How is it managing its Debt?
By checking its Debt to Equity and Cash Flow from Operations.

Q.1 Gross Profit margin of Supreme Petrochem Ltd?

Supreme Petrochem Ltd Gross profit margin which is the profit after deduction of direct costs, is 6.4% for FY-2010, which is above its 5-year median of 3.7%, indicating increasing margins.

Q.2 Operating Profit Margin of Supreme Petrochem Ltd?

Supreme Petrochem Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 7.67% for FY-2010, which is above its 5-year median of 4.83% indicating increasing margins.

Q.3 Net Profit Margin of Supreme Petrochem Ltd?

Supreme Petrochem Ltd Net Profit Margin is 3.76% for FY-2010, is above its 5-year median of 1.54%, indicating increasing margins.

	Current Level	5-year Historic Median
Gross Profit Margin (%)	6.4	3.7
Operating Profit Margin (%)	7.67	4.83
Net Profit Margin (%)	3.76	1.54

B: Does the business utilize capital efficiently?

Q.4 Return on Asset of Supreme Petrochem Ltd?

Supreme Petrochem Ltd Return on Asset is 8.54%, which is above its 5-year historical median of 4.01%, indicating improved asset utilization efficiency.

Q.5 Return on capital employed (ROCE) of Supreme Petrochem Ltd?

Supreme Petrochem Ltd Return on capital employed is 29.85% for FY-2010, which is above its 5-year historical median of 17.08%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.6 Return on Equity (ROE) of Supreme Petrochem Ltd?

Supreme Petrochem Ltd Return on equity is 28.08% for FY-2010, which is above its 5-year historical median of 12.73%, indicating the business is making better use of its shareholders capital.

C: How much debt does the business have and is it at a sustainable level?

Q.7 Debt to Equity ratio of Supreme Petrochem Ltd?

Supreme Petrochem Ltd Debt-to-Equity ratio is 0.00, which is lower the industry average of 0.46, indicating lower debt levels in the industry.

Q.8 Debt to cash flow from operations of Supreme Petrochem Ltd?

Supreme Petrochem Ltd Debt to cash flow from operations is 3.46, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Supreme Petrochem Ltd?

Q.1 Promoter shareholding and pledge status of Supreme Petrochem Ltd?

Promoters hold 64.24% of the Supreme Petrochem Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Supreme Petrochem Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Supreme Petrochem Ltd vs industry peers?

Supreme Petrochem Ltd revenue CAGR is 17.20%, compared to the industry median CAGR of 9.22%, indicating faster growth and gaining its market share.

Profit Metrics

	Current Level	5-year Industry Median
Revenue Growth (%)	-	9.2
Gross Profit Growth (%)	100	5.3
Operating Profit Growth (%)	77.1	10.7
Net Profit Growth (%)	221.1	6

Operating Efficiency

	Current Level	5-year Industry Median
Asset Turnover (x)	2.43	1.3
ROE (%)	28.08	10.1
ROCE (%)	29.85	13.45
Cash Conversion Cycle (days)	55.41	41

Valuation & price assessment

Q.1 Stock return of Supreme Petrochem Ltd over the last decade?

Over the last 9 year(s), the stock has delivered a CAGR of 23.9% based on the current price.

	9Y	5Y	3Y	1Y
Share Price CAGR	23.9%	15.9%	25.6%	5.1%

Q.2 Valuation ratios of Supreme Petrochem Ltd vs historical?

The current P/E ratio of 42.21 is higher than its historical median of 25.92, indicating that the stock is trading above its historical average valuation.

Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	42.21	25.92	14.30
Price to Book	-	5.51	2.05
Price to Sales	2.58	1.94	1.35
EV to EBITDA	23.86	16.20	9.88

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Check Before You Invest : Supreme Petrochem Ltd

Snapshot

Performance Analysis

Ownership & governance

Peer comparison (industry-wise, mcap)

Profit Metrics

Operating Efficiency

Valuation & price assessment

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