Stock Update: Supreme Industries (NSE: SUPREMEIND)

Supreme has been going strength to strength. Although it has not been able to sell its Supreme Chambers, it has shown consistent growth and operating results. It has its yearly closing in June. So, what was published last month was the full year results.

• Polymer processing went up by 9.8%. 
• Revenue was at 2965 cr, up 20% yoy
• Net Profit was at 232 cr, up 36.91% yoy
• Standalone EPS of 18.93
• Final dividend of 4.5/share was announced taking the full year dividend to 6/share.

Supreme has 4 major business segments.

Segment	Volume growth	Value growth
Plastic Piping	14%	28%
Packaging Products	9%	19%
Industrial Products	8%	14%
Consumer Products **	-10%	6%

** excluding PP Mats business which was discontinued

• The value added products segment has gone up by 31.5%
• Committed to capex of 280 cr primarily in capacity expansion in cross laminated films, protective packaging unit at Hosur, composite LPG cylinder & pipe unit and plastic piping unit.
• Total planned capex of around 1100 cr in the next 5 years, to be funded from internal accruals.
• The company expects a volume growth of around 16% and value growth of 25% in 2013.

Expected EPS for June 2013 : 21.5-23
PE range : 12-15
Possible price range (June 2013) : 258-345

In my previous update of the company, I had expected an FY12 EPS between 15-16 and a target price range of 180-240 by June end 2012. Both have been positively surpassed. The stock is making new highs recently. Expecting a one year forward price of close to 320-350. I continue to hold Supreme and it continues to be the largest position in my portfolio. I see no reason to other that sit tight on it.

Disclosure: I am invested in Supreme. Please due your own due diligence before investing.