Supreme Industries Limited — Q3 FY26 earnings call

Call held 21 Jan 2026

Management summary

Supreme Industries reported mixed results for Q3 FY26 and the nine months ended December 31, 2025, with strong volume growth in key segments like Plastic Piping Systems but a decline in overall operating profit and PAT due to polymer price volatility and associated inventory losses. The company is optimistic about demand recovery, particularly in the piping segment, and expects polymer prices to continue their upward trend. Strategic capacity expansions are underway, and the company is committed to becoming debt-free by the end of the fiscal year.

Highlights

  • Overall volume growth of 10% and product value growth of 3% for 9 months ended Dec 2025.

  • Plastic Piping System business grew by 16% in volume and 10% in value terms in Q3 FY26.

  • Value-added products turnover grew by 16% to Rs. 1118 crores in Q3 FY26.

  • Polymer prices have started an upward trend from calendar year 2026, with PVC world booking prices moving from $580 to $640.

  • Company expects to be debt-free by March 31, 2026, with a good cash surplus.

Concerns

  • Consolidated Operating Profit decreased by 11% to Rs. 980 crores for 9 months ended Dec 2025.

  • Consolidated Profit after Tax decreased by 22% to Rs. 520 crores for 9 months ended Dec 2025.

  • Estimated inventory loss of Rs. 100-120 crores for the 9 months due to polymer price declines.

  • Industrial component business (appliance sector) is facing turbulence and degrowth.

Key financials

2 periods

Headline

  • Plastic Goods Volume
    5,22,018 MT
    YoY +10%
  • Net Product Turnover
    ₹7,582 Cr
    YoY +3.4%
  • Consolidated Operating Profit
    ₹980 Cr
    YoY -11.2%
  • Consolidated Profit after Tax
    ₹520 Cr
    YoY -22.2%
  • Inventory Loss (9 months)
    ₹100 Cr

Q3

  • Value-added Products Turnover
    ₹1,118 Cr
    YoY +16.3%

What they filed

Q1 FY27: revenue up 4.2%, net profit up 39.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue2,273 2,510 3,027 2,609 2,394 +5%2,687 +7%3,528 +17%2,718 +4%
EBITDA319 309 416 319 297 −7%314 +2%623 +50%398 +25%
Net profit207 187 294 202 165 −20%153 −18%434 +48%281 +39%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

SegmentVolume GrowthValue Growth
Plastic Piping System (Q3)16%10%
Packaging Product Segment (Q3)2%-2%
Industrial Products Segment (Q3)0%1%
Consumer Product Segment (Q3)8%5%

Capital allocation

high confidence
  • Capex ₹1,200 Cr Entirely from internal accruals
    • Existing & new capital commitments including Wavin Business acquisition
    During the first nine months of the current year, Company has made capex outflow of Rs. 1031 Crs. including acquisition of Wavin Business. The Company expects total cash outflow during this year will be around Rs.1200 Crs. towards existing & new capital commitments including acquisition of Wavin Business. Entire Capex shall be funded from internal accruals.
  • Debt Net ₹132 Cr
    • Repayment Wavin funding of Rs. 132 crores paid back ₹132 Cr
    The net debt is 132 crores.
  • M&A Wavin Business Acquisition · Integrated

    Integration and realignment to achieve full potential

    Contributed to 16% overall growth in Q3; full potential from February onwards.

    Three units acquired through Wavin Business acquisition are fully integrated and realigned and shall be available for their full potential from February onwards.
  • Liquidity Liquidity disclosed Had a healthy operating balance of Rs. 950 crores, invested in liquid schemes which has come down. Expect good cash surplus on 31st March 2026.
    Since we had a healthy operating balance of Rs. 950 crores, we invested in liquid schemes which has come down. So, that is a temporary phase. And ultimately, we want to put our money for business purposes. Investment is not the core activity.

Guidance & targets

Volume

  • Overall volume growth Volume · current year · High confidence 12% to 14%
    The Company expects to grow overall in volume between 12% to 14% and 15% to 17% in Plastic Piping Business during the year over previous year.

    — M.P. Taparia

  • Plastic Piping Business volume growth Volume · current year · High confidence 15% to 17%

    — M.P. Taparia

Margin

  • Overall EBITDA margin Margin · current year · High confidence 13.5% to 14%

    Previously 14.5% to 15% → 13.5% to 14%

    '26-'27 we will talk in April. For the current year now, we have revised our guidelines. And we now believe that our margin will be between 13.5% to 14%.

    — M.P. Taparia

  • Q4 EBITDA margin Margin · Q4 FY26 · High confidence minimum 15%-16%
    But sir, that also means that in the 4th Quarter we are looking at minimum 15%-16% plus kind of a margin.

    — Shravan Shah

Revenue

  • Topline Revenue · FY26 · High confidence Rs. 11,000 crores to 11,500 crores

    Previously Rs. 12,000 crores → Rs. 11,000 crores to 11,500 crores

    Even the topline, you see, polymer prices, they are coming down. So, instead of 12,000 crores, now we are maintaining 11,000 crores to 11,500 crores.

    — P.C. Somani

  • PVC window business revenue potential Revenue · full capacity · Medium confidence In excess of 300 crores
    In excess of 300 crores, full capacity.

    — M.P. Taparia

Capacity

  • Plastic Piping Business installed capacity Capacity · FY 2026 · High confidence 1 million MT per annum
    Total Installed capacities of the Plastic Piping Business shall reach to 1 million MT per annum by FY 2026.

    — M.P. Taparia

  • Greenfield plants operational Capacity · By FY28 · High confidence operational
    They should be operational by FY'28.

    — M.P. Taparia

Debt

  • Debt status Debt · 31st March 2026 · High confidence debt-free
    We will be debt-free 1st April itself on 31st March only.

    — M.P. Taparia

What to watch in Q4 FY26

Net Debt Status

By March 31, 2026
Current Rs. 132 crores (as of Dec 31, 2025)
Target Debt-free

Why it matters

Management made a strong commitment to achieve debt-free status and have a good cash surplus, indicating robust financial health.

We will be debt-free 1st April itself on 31st March only.

Risks & concerns

  • Polymer Price Volatility

    medium

    Geopolitical tensions led to extreme volatility in commodity prices, resulting in lower growth in 2025 and Rs. 100-120 crores inventory loss for 9 months, impacting margins and topline guidance.

    Management acknowledged

  • Global Economic Uncertainty

    medium

    The 'VUCA' environment (volatility, uncertainty, complexity, ambiguity) and crude price fluctuations make forecasting difficult, impacting business planning.

    Management acknowledged

  • Weakness in Appliance Sector

    low

    The industrial component business catering to the appliance sector is experiencing turbulence and degrowth compared to the previous year.

    Management acknowledged

Q&A highlights

7 direct
Wavin Acquisition Volume Contribution Partial
Wavin was a part of it. After all, they are making the same product that we are making. Only some range, very small range were different. So, you can see the part of overall volume of 16% growth in the quarter was due to Wavin also.

Analyst sought specific quantification of Wavin's contribution, but management provided a qualitative answer, integrating it into overall growth.

Asked by Shravan Shah

PVC Price Outlook and China's Export Restrictions Direct
Prices now have started hardening. First thing I say, they stopped going down. The PVC world booking prices had gone down to $580. And currently have moved up to $640. And the rupee also has become weak... China is putting some restriction on the export from 1st April 2026, we anticipate the price may go further up little bit.

Provides clear directional guidance on raw material prices, a key input cost, and highlights external factors influencing it.

Asked by Shravan Shah

Revised Margin Guidance and Inventory Losses Direct
We believe in first 9-month Company might have taken a hit of between Rs. 100 crores to Rs. 120 crores in 9-month operation which resulted in our giving lower guidance of operating margin.

Quantifies the impact of polymer price volatility on profitability and explains the rationale behind the revised margin guidance.

Asked by Shravan Shah

Normalization of Finance Costs and Other Income Direct
You can start seeing from next year. It is not in this quarter. Because this quarter we have to wipe out the small borrowing that we have taken. So, the interest cost will come down. Finance cost will come down.

Clarifies that the increased finance costs and reduced other income are temporary and expected to normalize, impacting future profitability.

Asked by Keshav Lahoti

FY26 Topline Guidance Revision Direct
Even the topline, you see, polymer prices, they are coming down. So, instead of 12,000 crores, now we are maintaining 11,000 crores to 11,500 crores.

Highlights a significant revision in annual revenue guidance, directly linking it to raw material price movements.

Asked by Udit Gajiwala

Greenfield Plant Locations and Operational Timelines Direct
Two plants. One is near Gwalior that is Malanpur and other plant in Bihar near Patna. They should be operational by FY'28.

Provides specific details on future capacity expansion plans, including locations and expected operational dates.

Asked by Utkarsh Nopany

Industrial Component Segment Performance Direct
Industrial component to appliance sector is tough time and seeing a degrowth compared to previous year.

Identifies a specific segment facing headwinds, providing a nuanced view of overall industrial product performance.

Asked by Ronak Ostwal

Debt-Free Commitment and Cash Surplus Direct
We will be debt-free 1st April itself on 31st March only. We will have a good amount of cash surplus in our books on 31st March 2026.

Strong commitment from management regarding financial health and capital structure, indicating robust cash generation.

Asked by Shailly Jain

3 min read 6 chapters

Detailed narrative

Q3 FY26 Financial Performance Overview

Supreme Industries reported a 10% volume growth and 3% product value growth for the nine months ended December 31, 2025, with plastic goods sales reaching 522,018 MT. However, consolidated operating profit for the nine-month period decreased by 11% to Rs. 980 crores, and profit after tax fell by 22% to Rs. 520 crores, primarily due to an estimated Rs. 100-120 crores inventory loss from polymer price declines. The company's value-added products segment showed strong performance in Q3 FY26, growing by 16% to Rs. 1118 crores.

Piping Systems Business and Market Dynamics

The Plastic Piping System business demonstrated robust growth in Q3 FY26, with a 16% increase in volume and 10% in value terms. Management expressed confidence in achieving its full-year volume growth guidance of 15-17% for this segment, driven by the upcoming agriculture demand season starting in March. The company noted that destocking in the channel has ended, and normal stocking has resumed, indicating improved demand for plumbing and infra pipe in January.

Polymer Price Trends and Margin Outlook

Polymer prices, including PVC, have reversed their downward trend and started hardening from calendar year 2026, with PVC world booking prices rising from $580 to $640. This, coupled with rupee depreciation and anticipated export restrictions from China, is expected to lead to further price increases. The company revised its full-year EBITDA margin guidance to 13.5-14% (from an earlier 14.5-15%) due to inventory losses but expects Q4 margins to be at least 15-16% as price erosion has ceased and volumes are higher.

Capacity Expansion and New Product Initiatives

Supreme Industries is nearing completion of capacity expansions for Plastic Piping and Protective Packaging, which will be available for FY26-27. The total installed capacity for Plastic Piping Business is projected to reach 1 million MT per annum by FY 2026. The company plans to add 100,000 tons of capacity across all product segments, with new greenfield plants near Gwalior and Patna expected to be operational by FY28. The newly launched PP silent pipe system, in collaboration with Poloplast Gmbh, has been well received, and the PVC window business is set to commence commercial production in February 2026, with a potential revenue of over Rs. 300 crores at full capacity (250,000 windows per year).

Capital Allocation and Debt Management

The company incurred a capex outflow of Rs. 1031 crores for the nine months, including the Wavin acquisition, with a total projected outflow of around Rs. 1200 crores for the current fiscal year, entirely funded through internal accruals. Management affirmed its commitment to becoming debt-free by March 31, 2026, and expects to hold a good cash surplus by that date. The temporary increase in finance costs due to short-term borrowings for capex is expected to normalize from Q1 FY27.

Segmental Performance and Future Growth Drivers

While the Protective Packaging segment is focusing on increasing its product range and customized solutions, and the Consumer Product segment showed 8% volume and 5% value growth in Q3, the Industrial Products segment remained flat in volume. Specifically, the industrial component business catering to the appliance sector experienced turbulence and degrowth. The company continues to expand its composite LPG cylinder business, having executed LOIs for 2 lakh units and receiving further LOIs for another 2 lakh units for BPCL.

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