The Supreme Industries Limited (Supreme), India’s leading Plastics product manufacturing company, announced its Unaudited Standalone & Consolidated financial results for the Quarter and half year ended 30th September, 2022, at its Board Meeting held today.

Overview of Consolidated Results:

• The Board of Directors has declared interim dividend @ 300 % i.e. Rs. 6 per share of Rs. 2 each (FV), for the financial year 2022-23 .The Dividend will be paid to those shareholders whose names stand on the Register of Members as on the Record date i.e. 9th November, 2022.
• The overall turnover of value added products increased to Rs. 798 crores during the 2nd quarter of current year as compared to Rs. 758 crores in the corresponding quarter of previous year achieving growth of 5 %.
• The Company has total Cash Surplus of Rs. 493 crores as on 30th September, 2022 as against Cash Surplus of Rs. 518 crores as on 31st March, 2022.

Business Outlook

Mr. M. P. Taparia, Managing Director, The Supreme Industries Limited, said:

Plastics Pipe System business profit was severely affected due to continued fall in PVC resin prices in second quarter, which started with effect from April itself. The Company is supplying piping system from different Polymeric materials also, other than PVC, which overall resulted in positive outcome in this segment, in spite of severe fall in PVC prices.

In such difficult business conditions, the Company’s continuous volume growth in second quarter was quite encouraging. With steep fall in PVC resin prices where prices have dropped by Rs. 55/- per kg i.e 38% since April of this year augurs well for large volume growth in second half of the year, as the system becomes very affordable.

The Company is fully geared to cater to increased demand of it’s product with increased available capacity by Greenfield projects at three locations starting from July and shall be operational fully by December this year and also brown field expansion of capacities at other locations. The Company expects to achieve 25% plus volume growth in this segment for the year compared to last year business.

The Company has introduced Olefins fittings, PEX Piping System in this division which were well received. Further new systems are going to be launched during third quarter to augment the range offered to the market.

The business of Cross Laminated Film has started showing improved performance with increase in business of made-up products and penetrating in many export markets. The division has introduced many new made up products and was successful in expanding its market reach & making breakthrough in three new export markets. The division expects 10% volume growth in this business segment for the year with improved profitability.

In 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.

Material handling division is continuously expanding its customer base, introducing new products and also investing in new machine and moulds. It would strive to continue enlarge its customer base and product portfolio.

The furniture division has done well during the first half of the year, where it’s turnover has grown from Rs. 159 crores to Rs. 206 Crores, with improved profitability and 17% volume growth over corresponding period of previous year. There is a steep price correction in Polypropylene prices, it’s principal raw material, during the second quarter leading to de- growth in volume in the quarter. This will result in overall improved volume and profit for the full year in this division.

In Composite LPG Cylinder division, orders are being received from existing as well as new customers but unable to participate due to capacity constraint. Existing capacity is running at full capacity and primarily catering to the order received from Indian Oil Corporation. Work on doubling the capacity is progressing well and is likely to be operational by December, 2022.

Protective Packaging Division is doing good business in its consumer products, sports goods, yoga mats and kids puzzle & toys. Division is continuously developing and introducing new products for variety of applications. Initial feedback from the market is encouraging and expected to drive the profitability for the division going forward. The division continues to develop various customized solutions for the user industry and expects good business for the division. Good growth is witnessed in export markets also.

Performance Packaging Film has done well. Exports have also grown and received good response from countries in Middle East, Africa and Europe. With improved product mix and focus on increasing customer base, the Company would soon have all its capacities fully tied up and would require to look for expansion opportunities.

The Company’s Capex plan for the year 2022-23 of about Rs. 700 Crs. including carry forward commitment of Rs. 280 Crs is progressing with a little delay from the envisaged schedule. Entire capex shall be funded from internal accruals.

The prices of different Polymers particularly for polypropylene (PP), Low Denier Polyethylene (LDPE) and Poly Vinyl Chloride (PVC) have gone down between Rs. 31 per kg to Rs. 55 per kg since beginning of the year till now i.e. a reduction between 21% to 38%. Your company is large consumer of PVC Resin which has witnessed the highest fall since April,2022. This sharp reduction has resulted in inventory losses but would make products more affordable. Company expects business conditions to improve during second half of the year and remains optimistic in various business segments where it operates.