Shares of Supreme Industries climbed nearly 3% on Thursday, January 22, after the company maintained its full-year volume growth guidance even as it trimmed its margin outlook following the December quarter results announced earlier this week.
The stock was trading at Rs 3,440.70, up around 2.75%, as investors appeared to take comfort from management’s confidence in demand recovery and steady volume growth across key segments, despite near-term margin pressure.
Margin guidance revised, volumes unchanged
Supreme Industries’ management has lowered its FY26 EBITDA margin guidance to 13.5%–14%, from the earlier range of 14.5%–15%, citing sustained pressure on margins. Managing Director MP Taparia said the revision reflects pricing challenges and inventory-related impacts during the quarter.
However, the company maintained its volume growth guidance for the full financial year. Overall volume growth is expected to be in the range of 12%–14%, while the plastic piping segment is projected to grow 15%–17% in FY26.
According to management, pricing pressure in the plastic piping business has begun to stabilise. MP Taparia said the prolonged downward pricing trend has been arrested, and demand is expected to improve in the last quarter of FY26, supported by a good monsoon and favourable conditions in housing, agriculture, and infrastructure.
Q3 FY26 performance
For the December quarter, Supreme Industries reported revenue of Rs 2,687 crore, up 7% year on year. EBITDA for the quarter stood at Rs 314 crore, marking a 1.5% increase compared with the same period last year.
EBITDA margin narrowed to 11.7% in Q3 FY26, compared with 12.3% in the year-ago quarter. Both revenue and EBITDA were marginally below estimates, largely due to margin pressure in the piping business.
Capex and cash flow outlook
The company expects a total cash outgo of Rs 1,200 crore for the full year. Of this, Rs 1,031 crore has already been deployed towards capital expenditure related to existing and new commitments, including the Wavin acquisition. Supreme Industries said the entire capex will be funded through internal accruals.
Brokerage view
Nuvama has maintained a Hold rating on Supreme Industries with a target price of Rs 3,529. The brokerage noted that Q3 FY26 volumes beat expectations despite weak demand conditions, with pipe volumes rising 16% year on year and overall volumes up 13%, indicating market share gains.
However, Nuvama flagged margin disappointment, noting that pipe EBIT per kg stood at Rs 9.1 due to inventory losses. Ex-inventory EBIT per kg was Rs 12.6, still below historical averages amid aggressive pricing. The brokerage said the cut in FY26 margin guidance reflects continued margin pressure, warranting a cautious stance.
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