Supreme Industries has been given a "Buy" rating by Sharekhan, with a revised price target of Rs 5,700. The company's Q2 FY2025 earnings were lower than expected due to fluctuations in PVC prices, subdued infrastructure demand, and prolonged monsoon conditions.
However, adjusted operating profit margins exceeded estimates. Management has revised their volume growth guidance, now expecting a 14-15% year-on-year increase overall, with plastic piping volume growth projected to be between 16-18% for FY2025. The guidance for consolidated operating profit margins has been slightly adjusted to a range of 14.5-15.25%. Analysts believe that stabilization of PVC prices at lower levels, along with a rebound in demand from infrastructure, housing, and agriculture sectors, will contribute to a strong performance in the second half of the fiscal year.
The recent stock price correction of over 15% is seen as an opportunity for investors to buy.