Rallies Over Rs 600 In 1 Day; Midcap Stock Supreme Industries Zooms 16% After MSCI Adds In Global Index

Supreme Industries, a midcap stock, has skyrocketed by more than Rs 600 or 16.25% in a single day after the MSCI included the company in its Global Standard Index during its August review. Simply put, with effect from September 31, 2023, this India's largest plastic manufacturing and processing company will be part of the MSCI Global Standard Index.

In the early deals, Supreme Industries share price soared by a whopping Rs 626.3 or 16.25% by hitting a new 52-week high of Rs 4480 apiece on BSE.

At the time of writing, the stock traded at Rs 4149.85 apiece, up by Rs 296.15 or 7.7% on the exchange. Currently, its market value is at Rs 52,714.25 crore.

Supreme witnessed the most rise compared to other stocks that are included in the MSCI index.

Along with Supreme Industries, seven more Indian-based stocks were added in MSCI India Domestic Index such as Ashok Leyland, Astral, Cummins India Kirloskar, HDFC Asset Management, IDFC First Bank, Power Finance Corporation, and REC. However, Adani Group-backed ACC was the only stock that was excluded from the index.

During the June 2023 quarter, Supreme Industries posted a PAT (before OCI) of Rs 215.54 crore, up by 0.8% YoY, while operating profit jumped by 4.89% YoY to Rs 342.91 crore. However, consolidated income climbed by 7.79% YoY to Rs 2382.78 crore.

In Q1FY24, the company's overall turnover of value-added products remains at Rs 756 crore as compared to Rs 761 crore in the corresponding period of the previous year. As of June 30, 2023, the company has a total cash surplus of Rs 951 crore, rising from Rs 738 crore as of March 31, 2023.

On July 28, M. P. Taparia, Managing Director of the company said, that Supreme Industries is ready to seize the business opportunities and continues to commit desired investment. During the year, the company has plans to add 4 additional systems viz. (i) PP multilayer silent pipe system (ii) Gas Piping system (iii) PE/AL/PE piping system and (iv) PPR pipe system for Industrial applications along with its existing 36 Systems in its' flagship Plastics Piping Business.

Also, expansion of capacities and enlarging the product basket is underway by the company, which would increase the installed capacities of this division to 7,50,000 M.T. per annum by the end of FY 24 against the present capacity of 6,00,000 M.T. per annum.

Supreme plans to introduce newly developed Cross Plastic Film are progressing well and a plant with a capacity of 2500 MT per annum should be in operation by the end of FY 24.

Lastly, the company has a capex plan in excess of Rs 750 crore for the fiscal FY24, including carry forward commitments of the previous year. Entire Capex shall be funded from internal accruals.

Supreme Industries is India's leading plastics product manufacturer, offering a wide and comprehensive range of plastic products in India. The company has 28 technologically advanced manufacturing facilities located at various places spread across the country.

Supreme Industries shares are titled Expensive Stars on Trendlyne which means that these are stocks with high durability and momentum scores (above 50-55) and expensive valuation (less than or equal to 30 in valuation score). These stocks are considered high performers that are however expensive at their current price.

As per Trendlyne, the 50-Day SMA of the stock is Rs 3,264.2, while 100-Day SMA is Rs 3,080.2, and the 200-DAY SMA is Rs 2,720.6 apiece. Currently, its beta 1-year is 0.59%, which means very low volatility in the stock.

According to Investing.com, 12 analysts have recommended a strong buy taking into consideration the moving averages of the stock, while 7 recommended buying on technical indicators. The RSI is 65.109.

Post Q1 earnings, Prabhudas Lilladher revised its FY24/25E earnings estimates upward by 3.5%/4.4% in the company. It added, "We continue to believe SI is well placed to capture demand across its segments given 1) capacity expansion in different geographies, 2) new product expansion e.g. expanding in PVC window & doors manufacturing and adding 4 piping systems namely (i) PP multilayer silent pipe (ii) Gas Piping (iii) PE/AL/PE piping and (iv) PPR pipe, 3) wide pan India distributors n/w of 4500 channel partners, with 1443 distributors for pipe business; additional 100 in FY24, and 4) cash surplus of Rs9.5bn for funding expansion plans."

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