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INVESTMENT INSIGHTS

Check Before You Invest : Supreme Industries Ltd

BSE: 509930 NSE: SUPREMEIND ISIN: INE195A01028
  |   Sector:  Chemicals & Fertilizers   |   Industry:  Plastic Products

Snapshot

Q.1 Which industry/sub-sector does Supreme Industries Ltd belong to?
Supreme Industries Ltd belongs to the Chemicals & Fertilizers sector, operating specifically within the Plastic Products segment.
Q.2 Is Supreme Industries Ltd a good quality company?
Supreme Industries 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 Industries Ltd undervalued or overvalued?
Supreme Industries Ltd appears Fair, as its key valuation ratios are in line with 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 48.66 46.91
Price to Book 7.53 8.86
Price to Sales 4.14 4.65
EV to EBITDA 28.64 33.16
Q.4 Is Supreme Industries Ltd a good buy now?
Supreme Industries 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.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Supreme Industries Ltd?
Supreme Industries Ltd revenue growth is 3.1% for FY-2025, which is below its 5-year CAGR of 13.64%, indicating slower growth.

Q.2 Gross Profit margin of Supreme Industries Ltd?
Supreme Industries Ltd Gross profit margin which is the profit after deduction of direct costs, is 14.1% for FY-2025, which is below its 5-year median of 15.8%, indicating decreasing margins.

Q.3 Operating Profit Margin of Supreme Industries Ltd?
Supreme Industries Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 13.89% for FY-2025, which is below its 5-year median of 15.39% indicating decreasing margins.

Q.4 Net Profit Margin of Supreme Industries Ltd?
Supreme Industries Ltd Net Profit Margin is 9.2% for FY-2025, is below its 5-year median of 10.56%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 14.1 15.8
Operating Profit Margin (%) 13.89 15.39
Net Profit Margin (%) 9.2 10.56

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Supreme Industries Ltd?
Supreme Industries Ltd Return on Asset is 13.41%, which is below its 5-year historical median of 16.69%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Supreme Industries Ltd?
Supreme Industries Ltd Return on capital employed is 23.23% for FY-2025, which is below its 5-year historical median of 29.89%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 11.25%, indicating value creation.

Q.7 Return on Equity (ROE) of Supreme Industries Ltd?
Supreme Industries Ltd Return on equity is 17.84% for FY-2025, which is below its 5-year historical median of 22.49%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Supreme Industries Ltd?
Supreme Industries Ltd Cash conversion cycle is 28 days, in line with its 5-year historical median of 28 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 1.46 1.58
ROE (%) 17.84 22.49
ROCE (%) 23.23 29.89
Cash Conversion Cycle 28 days 28 days

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

Q.9 Debt to Equity ratio of Supreme Industries Ltd?
Supreme Industries Ltd Debt-to-Equity ratio is 0.00, which is lower the industry average of 0.25, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Supreme Industries Ltd?
Supreme Industries Ltd Debt to cash flow from operations is 0, which is at a healthy level.

Ownership & governance

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

Q.1 Promoter shareholding and pledge status of Supreme Industries Ltd?
Promoters hold 48.96% of the Supreme Industries Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

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

Q.1 Revenue growth of Supreme Industries Ltd vs industry peers?
Supreme Industries Ltd revenue CAGR is 13.64%, compared to the industry median CAGR of 15.69%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 3.1 15.7
Gross Profit Growth (%) -7.5 15.2
Operating Profit Growth (%) -7.4 13.9
Net Profit Growth (%) -10.2 15.6
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.46 1.43
ROE (%) 17.84 20.51
ROCE (%) 23.23 27.53
Cash Conversion Cycle (days) 27.66 34

Valuation & price assessment

Q.1 Stock return of Supreme Industries Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 15.8% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR		 15.8% 11.2% 9.9% 4.9%
Q.2 Valuation ratios of Supreme Industries Ltd vs historical?
The current P/E ratio of 48.66 is in line with than its historical median of 46.91, indicating that the stock is trading near 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 48.66 46.91 22.05
Price to Book 7.53 8.86 1.89
Price to Sales 4.14 4.65 1.33
EV to EBITDA 28.64 33.16 10.86

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