6th April, 2023

INVESTMENT
IDEAS
SUPREME INDUSTRIES LIMITED CMP: Target Price: Upside:
2684.00 3174 18%
VALUE PARAMETERS Investment Rationale:
Ÿ Supreme Industries operates in various product categories viz. Plastic
Face Value (Rs.) 2.00
Piping System, Cross Laminated Films & Products, Protective Packaging
52 Week High/Low 2816.45/1668.60
Products, Industrial Moulded Components, Moulded Furniture, Storage
M.Cap (Rs. in Cr.) 34,094.01 & Material Handling Products, Performance Packaging Films and
EPS (Rs.) 65.32 Composite LPG Cylinders. It has 28 technologically advanced
P/E Ratio (times) 41.09 manufacturing facilities located at various places spread across the

P/B Ratio (times) 8.72 country.

Dividend Yield (%) 0.89 Ÿ• Recently, the company has commissioned its new production facility
Stock Exchange BSE at Cuttak, Odisha with initial capacity of 16800 MTPA with a capex of
Rs. 90 crore. The company is expected to increase the capacity to
43,200 MTPA by first quarter of FY 2024 once all the machinery

SHAREHOLDING PATTERN ordered is delivered and installed. It will manufacture Plastic Piping
products. It plans to penetrate plastic piping market in Eastern India
where it has good market share. Last year, the company has also
13.32 18.62 undertaken Greenfield unit at Guwahati and Erode, which has become
Foreign Institutions operational. It has also undertaken brownfield expansion at existing
17.96 Non Promoter Corporate Holding Promoters
Public & Others capacity which has increased the installed capacity to 615000 MTPA as
48.85
on 31 March 2023.

1.25 Ÿ• During December 2022 quarter, the Company has achieved 51%
volume growth in third quarter on a lower base of corresponding
quarter in the previous year, as huge de-stocking took place in that
quarter. Piping business has witnessed volume growth of 48%, which is
very encouraging. The Company expects to maintain the growth
P/B CHART momentum, with increased range of system which got commissioned
4000.00 last year along with affordable raw material prices.
3500.00
3000.00
2500.00 Ÿ• The Cross Laminated film division has introduced many new made
2000.00
1500.00 up products and was successful in acquiring customers by entering in
1000.00
500.00 additional countries. The division expects volumes to be around the
0.00
same level of previous year with improved profitability.

Ÿ• Industrial Component division continues to expand its customer

base to optimally use its production capacities. The business of home
6-Jan-
20

9-Jul-20
20-Jun-
18
20-Aug-
18

18

30-Aug-
19

7-Sep-
20

6-Jan-
1-Jul-19
26-Dec-

22-Feb-

5-Nov-

4-Mar-
19

19
20-Apr-

24-Oct-

30-Apr-

5-Nov-
19

20

20
11-
18

18

May-20

appliances and white goods, which constitutes larger share of this

division, is likely to improve further with diversified customer base and
5.607.359.1010.85Close Price
acquisition of new businesses.

FINANCIAL PERFORMANCE (Rs.in Cr.)

Risk
ACTUAL ESTIMATE Ÿ• High commodity prices

FY Mar-22 FY Mar-23 FY Mar-24 Ÿ• Economic slowdown

REVENUE 7772.82 9064.62 9795.37
EBITDA 1242.11 1099.64 1489.56
Valuation
EBIT 1012.59 767.85 1177.60 The company has strong balance sheet with zero debt and cash surplus. The

NET INCOME 968.45 788.59 1073.51 recent capex was also funded by the internal accruals. Going forward, the
business of company is expected to sustain growth momentum on the back
EPS 76.24 62.57 81.83
of new capacity addition, new product launches and customer acquisition. Thus,
BVPS 302.64 347.51 401.83
Source: Company's Website, Reuters &
RoE 27.62% 19.67% 22.88%
SUPREME INDUSTRIES LIMITED CMP: Target Price: Upside:
2684.00 3174 18%
VALUE PARAMETERS Investment Rationale:
it is expected that the stock will see a price target of Rs.3174 in 8 to 10 months’
time frame on three year average P/BV of 7.9x and FY24 BVPS of Rs.401.83.

Source: Company's Website, Reuters &

SYMPHONY CMP: Target Price: Upside:

VALUE PARAMETERS Investment

Ÿ The Company manufactures products for the residential, commercial and
Face Value (Rs.) 2.00
industrial segments. Its residential portfolio includes models such as
52 Week High/Low 1218.95/821 tower, personal, desert, room and window air-coolers. Its commercial
M.Cap (Rs. in Cr.) 6892.16 air-coolers are popular in open restaurants, showrooms, large halls and
EPS (Rs.) 23.44 party plots. Its industrial air coolers greatly fulfil the increasing demand
from factories, schools, malls, assembly halls, warehouses and metro
P/E Ratio (times) 42.03
stations, among others. It offers services to industries such as banking,
P/B Ratio (times) 8.36
automobile, packaging, distilleries and railways.
Dividend Yield (%) 0.90
Ÿ• According to the management of the company, in domestic market, there
Stock Exchange BSE
is a decent visibility of consumer sales across the products, the channels
and the geography.
SHAREHOLDING PATTERN
Ÿ• On the development front, the company has launched Hi-Tech BLDC
Air Cooler. BLDC (brushless direct current motor) fans are available, but
10.15 4.07
11.1 1.43 in the air cooler, Symphony has achieved a breakthrough in terms of the
Foreign Institutions technology leading to power saving up to 50%. The company has
Non Promoter Corporate Holding
launched 3 models in the BLDC range of 80 liters, 55 liters and 30 liters
Promoters water tank capacity and in line with the technology; these will be
73.25 Public & Others
premium price with a decent profitability.

Ÿ• According to the management of the company, the company is increasing

the prices every month although in small measures since last eight
months and the prices are expected to increase as the commodity prices
P/B CHART are still higher. Its EBITDA margins, which are at 19 % were a much
higher around 32% a few years ago, so its eventual goal is to be at those
2500.00
historical sorts of gross and EBITDA margins. Moreover, the company
2000.00 has achieved the milestone of selling over 25 million air coolers across
60-plus countries.
1500.00

Ÿ• Debt equity ratio of the company is 0.30:1 and on trailing 12 months, the
1000.00
return on net worth stands at 20%.
500.00
Ÿ• The management of the company is optimistic about a good summer
0.00 this year and expects decent demand, basically summer months are key
months for the retail sales of the company.
1-Jul-19

6-Jan-

9-Jul-20

6-Jan-
20

7-Sep-
20
20-Aug-
18

26-Dec-
18

30-Aug-
19

5-Nov-
20-Jun-
18

22-Feb-
19

5-Nov-

20
20-Apr-
18

30-Apr-
19

19

4-Mar-
20
11-
24-Oct-
18

May-20

7.0010.0013.0016.00Close Price
Risk
Ÿ• Regulatory risk
FINANCIAL PERFORMANCE (Rs.in Cr.)
Ÿ• Technological changes risk

ACTUAL ESTIMATE
Valuation
FY Mar-22 FY Mar-23 FY Mar-24
The company has strong balance sheet and the management of the company
REVENUE 1039.00 1276.10 1464.06
expects decent visibility of consumer sales in the domestic market and
EBITDA 161.00 202.48 258.51 innovative value-added products, price hike & softening of input cost.
EBIT 137.00 172.52 231.32 Current global economic situation has led to demand headwinds especially in
NET INCOME 120.00 163.63 206.55 Australia and USA. The firm will optimize product innovation and cost
through leveraging Indian and Global operations and manufacturing
EPS 17.20 22.68 29.39
facilities and agile supply chain opportunities. Moreover, increasing
BVPS 120.07 124.83 121.36 temperature, a strong brand and continuous innovation would drive the
RoE 15.01% 20.90% 23.79% growth. Thus, it is expected that the stock will see a price target of Rs.1121 in

Source: Company's Website, Reuters &

 SYMPHONY CMP: Target Price: Upside:

VALUE PARAMETERS Investment

8 to 10 months’ time frame on 3 yrs average P/BV of 9.24x and
FY24 BVPS of Rs.121.36.

Source: Company's Website, Reuters &

Above calls are published in “Wise Money Issue No. 889”
E-mail: smc.care@smcindiaonline.com

Corporate Office:
Mumbai Office: Kolkata Office:
11/6B, Shanti Chamber,
Lotus Corporate Park, A Wing 401 / 402 , 4th 18, Rabindra Sarani, Poddar Court, Gate No-
Pusa Road, New Delhi -
Floor , Graham Firth Steel Compound, Off 4, 5th Floor, Kolkata - 700001
110005 Tel: +91-11-30111000
Western Express Highway, Jay Coach Signal, Tel.: 033 6612 7000/033 4058 7000
www.smcindiaonline.com
Goreagon (East) Mumbai - 400063 Fax: 033 6612 7004/033 4058 7004
Tel: 91-22-67341600, Fax: 91-22-67341697

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