Supreme Industries (SI IN) – Q2FY26 Result Update – Robust Pipe Volumes; ADD Tailwinds in H2 – Upgrade to ‘BUY’
Published on 28 Oct 2025
Supreme Industries’ (SI) Q2FY26 volume growth was 11.8% above our estimates of 6.8%. SI expects H2FY26 to better than H1FY26, supported by the likely imposition of ADD on PVC resin, improved agriculture demand, and higher government spending. EBITDA margin in Q2FY26 contracted by 160bps YoY to 12.4%, primarily due to higher other expenses arising from the acquisition and consolidation of the Wavin business. The management has revised its FY26 guidance for overall volume growth of 14–15% to 12-14%, while maintaining its P&F volume growth of 15–17% and EBITDA margin guidance at 14.5–15%. In FY26 SI expects its plastic pipe segment capacity to reach 1mn MT. We estimate FY25-28E revenue/EBITDA/PAT CAGR of 14.6%/18.2%/19.6%, with volume CAGR of 13.0% and EBITDA margin expansion of ~130bps. We have revised our earnings estimates for FY27/FY28E by 0.9%/0.6% and maintain TP to Rs4,723 (earlier Rs 4,758) based on 40x Sep’27E earnings. We are upgrading our rating from ‘Accumulate’ to ‘BUY’’, due to recent correction in stock prices.
