CLSA has maintained its hold rating on Supreme Industries while cutting its target price to ₹4,275 per share after a soft Q2FY26 performance marked by weaker margins despite double-digit volume growth.
The brokerage said EBITDA declined 7% year-on-year, missing estimates, though overall volume rose 12% year-on-year, supported partly by the Wavin acquisition. On an organic basis, volumes grew 10% year-on-year. The company guided for FY26 volume growth of 12–14% (versus 8% in 1HFY26) and EBITDA margins in the range of 14.5–15.5%, compared to 12.3% achieved in the first half.
CLSA noted that management is banking on a demand uptick in the second half of the year, led by stronger agricultural and infrastructure spending. It added that while the volume growth guidance appears achievable if demand recovers, meeting the upper end of the margin range may be challenging amid higher input costs and limited pricing power.
The brokerage continues to prefer a cautious stance until margin visibility improves, though long-term structural drivers for polymer pipes and building materials remain intact.
Disclaimer: The views and recommendations above are those of CLSA. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
