Supreme Industries Limited

For the first half of FY26, Supreme Industries reported a net product turnover of ₹4951 crores, representing a 2% value growth and 8% volume growth (338,224 MT) compared to the previous year. However, consolidated operating profit for H1 FY26 decreased by 15% to ₹656 crores, and profit after tax fell by 24% to ₹367 crores. The EBITDA margin for H1 FY26 stood at 12.3%, impacted by raw material price volatility and lower volumes in certain segments.

In Q2 FY26, the Plastic Piping System business demonstrated robust growth, with a 17% increase in volume and an 11% increase in value. Conversely, the Packaging Product segment experienced a 2% degrowth in both volume and value. The Industrial Products segment saw an 8% decline in volume and a 14% decline in value, while the Consumer Product segment grew 6% in volume but degrew 1% in value. The overall turnover from value-added products increased by 18.3% to ₹1073 crores in Q2 FY26 from ₹907 crores in the corresponding quarter of the previous year.

The company successfully acquired Wavin's Plastic Pipe Business, including three manufacturing units, effective August 1, 2025, adding 71,000 MT of capacity. This acquisition cost ₹260 crores. Additionally, Supreme Industries entered into a Master Technology License Agreement with Wavin B.V. Netherlands, gaining exclusive access to existing and future technologies for plastic piping systems in India and SAARC countries for seven years. Wavin contributed 3,000 tons in volume during August and September 2025, with management expecting its margins to align with the company's average from November.

Supreme Industries incurred a capex outflow of ₹869 crores in H1 FY26, which included the Wavin acquisition. The total planned capex for FY26 is estimated at ₹1300 crores, entirely funded through internal accruals. Significant investments include approximately ₹200 crores for a window profile project and ₹80 crores for a silent pipe system. The company's net cash surplus reduced to ₹49 crores as of September 30, 2025, from ₹944 crores on March 31, 2025, due to these capital outlays. Management expects temporary gross debt of ₹240 crores to be repaid by December, leading to a reasonable cash surplus by March 2026.

The company maintains its full-year FY26 guidance for overall volume growth at 12-14% and for the Plastic Pipe Segment at 15-17%. The EBITDA margin for the full year is projected to be between 14.5% and 15%. Annual turnover is expected to be between ₹11,000 crores and ₹11,500 crores. The protective packaging division is targeted to achieve ₹1,000 crores in revenue this year with double-digit volume growth. The company aims to increase its export turnover to 5% of total turnover from the current less than 3%.

The global economy's low growth phase has led to downward pressure on crude oil and polymer prices, resulting in inventory losses of ₹50-60 crores in H1 FY26. Management believes this trend may subside unless crude oil prices drop drastically. Demand in the agricultural sector was adversely affected by an early and extended monsoon in H1, but a rebound is anticipated from November onwards. Infrastructure demand remains subdued due to lower government spending. The company expects robust demand in the plumbing and agri sectors in the second half of the year.

The company is progressing with capacity expansions for plastic piping and protective packaging products. A new unit for material handling products is planned at Malanpur (M.P.), with greenfield units in Bihar and Jammu for plastic piping, and Western Maharashtra for protective packaging. Commercial production for the window profile project, with an investment of ₹200 crores, is expected to commence in December 2025. New PP silent pipe systems under the 'Serene' and 'Serene Plus' brands, developed in collaboration with Poloplast Gmbh, have also begun production.