Motilal Oswal Reiterates Buy Call on Supreme Industries, Targets Rs 4320

Supreme Industries Reports Strong Quarterly EBITDA Growth

Supreme Industries (SI) has reported a strong set of quarterly results, despite a lower-than-expected performance. The company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) growth for the fourth quarter of FY26 (4QFY26) witnessed a significant increase of approximately 50% compared to a dip in the first nine months of FY26 (9MFY26).

The main driver behind this improvement was a 34% rise in EBIT/kg (Earnings Before Interest and Taxes per kilogram) to INR22, primarily due to inventory gains of around INR0.7-0.8 billion and operating leverage. Additionally, the company witnessed a substantial rise in plastic pipe volume of approximately 18% year-over-year (YoY).

Looking ahead, management has guided piping volume growth at around 15-17% for FY27. Based on this positive outlook, analysts expect SI to achieve a 16% compound annual growth rate (CAGR) in revenue, 20% CAGR in EBITDA, and 23% CAGR in profit after tax (PAT) over FY26-28.

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Revenue/EBITDA/PAT CAGR Projections for Supreme Industries

The research report by Motilal Oswal values the stock at 37 times the estimated earnings per share (EPS) for FY28, resulting in a target price (TP) of INR4,320. In light of this analysis, the brokerage firm reiterates its BUY rating for Supreme Industries.