Supreme Industries (SI IN) – Q2FY27 Result Update – Improving Demand Outlook to Support Volume Growth – Downgrade to ‘ACCUMULATE’
Published on 27 Oct 2026
Supreme Industries (SI) revised its FY27 volume growth guidance downward, with overall company volume growth now expected at ~10% (vs. 12–13% earlier) and plastic piping growth at 13% (vs. 15–17% earlier). Management maintained its EBITDA margin guidance at 14–14.5%, EBITDA margins in Q2FY27 were impacted due to a lag of 10–15-day in passing on PVC and CPVC prices, along with sharp increases in polyethylene prices, which weighed on the packaging and consumer segments. CPVC volumes grew 30.5% YoY in H1 FY27, while further price hikes of 3–7% were announced. SI is maintaining adequate raw material inventories to mitigate import and shipping uncertainties and expects FY27 capex cash outflow of INR 7–7.5bn, with ongoing greenfield and brownfield expansions progressing as planned. We estimate FY26-29E revenue/EBITDA/PAT CAGR of 15.5%/16.1%/19.5%, with volume CAGR of 13.1% and EBITDA margin expansion of ~20bps. We have downgraded our earnings estimates for FY27/FY28E by 2.9%/2.4%. We downgrade to ‘ACCUMULATE’ rating from ‘BUY’ with a TP to INR 3,583 (earlier INR 4,414) based on 30x Sep’28E earnings
