The Supreme Industries Limited (Supreme), India’s leading Plastics product manufacturing company, announced its consolidated financial results for the Quarter ended 30th September 2024.

Supreme posted net profit of Rs. 206.60 crore for the quarter ended September 30, 2024, down 15% from Rs. 243.19 crore in the year-ago period. The revenue fell 1.5% to Rs. 2,273 crore vs Rs. 2,308.7 crore in the corresponding period a year ago.

The earnings before interest, taxes, depreciation, and amortisation declined 10.4% to Rs. 319.2 crore from Rs. 356.3 crore in the same period a year ago. The margin narrowed to 14% from 15.4% in the second quarter of FY24.

M. P. Taparia, Managing Director, The Supreme Industries Limited, said: Plastic Pipe Systems business growth was severely affected due to extreme volatility in PVC resin prices, low spending on infrastructure in the first six months by Governments and extended monsoon.

“Due to Red sea shipment movement blockage, the container productivity went down extremely. It laid to steep freight increase from Asian countries to India. 66% demand of PVC resin in India is met from imports. Out of that volume, more than 80% of import is coming from Asian countries. This has led to an increase in the cost of PVC resin between Mid-April to 30th June by 19%.

“As the freight rates moved down, the prices took a deep cut between 1st July to 16th August. The prices then went down by 17.5%. This type of price volatility in a very short period led to deep de-stocking in the entire trade channel. As the rainy season got extended, the demand revival for Agricultural pipe also remained subdued in the month September. The Government spending on Infrastructure also had gone down in the first half of this fiscal year.

“Thus, the Company has revised its guideline of 25% volume growth in Plastic Pipe System to be between 16 to 18% for this year.

“Now the price volatility has eased, and price trend of PVC will sustain or go up marginally. Business season has started. Monsoon has withdrawn. The government has also announced an increased infra spending in the second half of this financial year. The Company is fully geared to cater to increased demand of its product with increased available capacity from various ongoing brown field expansion at multiple locations.

“The new green field unit dedicated for production of varieties of Industrial and ball valves at Malanpur (M.P.) has commenced commercial production w.e.f. 1st September 2024. The company has been allotted required land near Patna at Bihar and also purchased required private land at Kathua District in Jammu & Kashmir for putting up plastic product complex including Plastic Piping system. Execution of projects at these locations shall be taken in hand during the next financial year. With completion of all the expansion plans undertaken in hand, total installed capacities of the Piping System division shall reach 8,35,000 M.T. per annum by the end of FY 24-25.

“The business of Cross Laminated Film has started showing improved performance with improved demand for Tarpaulins and penetrating newer export markets. The division expects about 15% volume growth in this business segment for the year with improved profitability. Trials have commenced for the newly developed Cross Plastic Film which has good export potential. The commercial launch of the product is expected by December 2024.

“The Company has expanded and introduced various new models of chair & cabinet in its furniture segment. 10 new models have been introduced in the first half of FY 24-25. The division continues to add showrooms to improve awareness of its range of premium products. Total strength of showrooms has reached 328 by end of September’24 from 308 showrooms as on 31st March’24. Focus onstrengthening distribution channel and adding more retail outlets continued.

“In the Industrial Component division, business conditions are improving and Company expects demand scenario to further improve in sectors of home appliances & white goods which constitutes larger part of this business. The division is also working to expand its customer base and develop the business in new sectors and witnessing positive outcome.

“The Material Handling Division is continuously expanding its customer base, introducing new products and also investing in new machines and moulds. Orders have been placed for requisite equipment for Bubble Guard Board and Capacity expansion of PP hollow sheets. The division would continue to strive to enlarge its customer base and product portfolio paving the way for moderate growth.

“Composite LPG cylinder division continues to cater to existing overseas customers and also participates in various export enquiries. Supplies against new LOI received from Indian Oil corporation Limited (IOCL) are taking place regularly and expects to receive orders for additional quantities also. Response to Company’s efforts to engage with the distribution system of LPG cylinders with promotional activities are positive.

“The Protective Packaging Division is doing good business and its focus on developing customized solutions is working well. The strategy to work more on fabricated products is yielding a positive outcome. The division is continuously increasing its fabrication capacities in various geographies to cater to increased demand. Expansion activities are undertaken at Jadcherla (Telangana), Malanpur (M.P.) and Kharagpur (West Bengal) which shall be in place during the 3rd & 4th quarter of this financial year. Negotiations for a suitable location for a new greenfield site near the port in the western region to cater to export opportunities and domestic demand are yet to be concluded.

“The Performance Packaging Division continues to utilize its capacities optimally and work on improved product mix and post extrusion value added products. Export opportunities remain the focus area and the division is able to penetrate some new countries.

“The Company has placed equipment orders and also awarded civil construction work for making Windows at its new site at Kanpur Dehat in U.P. In the first phase, Company has now planned to put entire window making facilities at Kanpur and cater to customers in Uttar Pradesh, Uttarakhand and NCR. The Company expects to launch and supply Windows in the first half of 2025-26.

“Looking at the business outlook and opportunities, the Company has made Capex commitments including carry forward commitments of around Rs. 1,500 crores. Total cash outflow during the current year is not likely to exceed Rs. 1000 crore and shall be funded entirely from internal accruals.”