India’s leading plastics product manufacturer to Acquire Wavin India’s Piping Business for USD 30 Million, Expanding Capacity by 73,000 MT and Gaining Exclusive Technology Access for Seven Years

With a PE ratio of 41.4x, the company trades at a premium compared to the industry PE of 27.4x. The company has ROCE of 28.6 per cent and ROE of 21.7 per cent.

Supreme Industries Ltd has announced a significant strategic move by signing a Memorandum of Understanding (MoU) to acquire Wavin India's piping business. The acquisition, valued at USD 30 million plus net working capital, will be executed either through a slump sale or share acquisition. Wavin India, a part of the Orbia Group, operates in the plastics industry, specifically manufacturing piping systems. The acquisition will enhance Supreme Industries' capacity by 73,000 MT annually, facilitating efficient service across North and South India. The deal will also provide Supreme Industries with exclusive access to Wavin B.V.'s existing and new technologies for seven years, aimed at improving water supply, sanitation, and building performance products. The acquisition is expected to be completed by 30th June 2025, subject to regulatory approvals.

The Supreme Industries Ltd., a prominent player in the plastics sector, is currently trading at a stock price of Rs 3316.2. The company has a market capitalisation of Rs 42,124.65 crores. Over the past year, the stock has experienced a decline of 14.92 per cent, although it has shown a 66.3 per cent return over three years. The company's 52-week high and low are Rs 6482.4 and Rs 3286.25, respectively, and it holds a PE ratio of 48.19. With a robust presence in the market, Supreme Industries continues to expand its capabilities and market reach through strategic acquisitions and technological advancements. The company has been maintaining a healthy dividend payout of 35.1 per cent.

Also Read: Energy Giant Announces Rs 96,000 Crore Investment in Chhattisgarh: 4200 MW Nuclear Project, 1200 MW Hydro Storage, and 2 GW Renewable Energy Expansion

In the Quarterly Results of December 2024, the company reported a revenue of Rs 2,509.88 crore, reflecting a 2.48 per cent YoY growth and a 10.42 per cent QoQ increase from Rs 2,272.95 crore in September 2024. Net profit stood at Rs 186.97 crore, marking a decline of 27.01 per cent YoY and 9.50 per cent QoQ from Rs 206.60 crore in September 2024. The net profit margin for the quarter was 7.45 per cent, compared to 9.09 per cent in September 2024 and 10.46 per cent in December 2023.

For the full financial year FY24, revenue reached Rs 10,134.26 crore, recording a 10.14 per cent growth from Rs 9,201.59 crore in FY23. Net profit increased by 31.49 per cent to Rs 1,021.76 crore from Rs 897.17 crore in the previous year. The net profit margin improved to 8.85 per cent in FY24 from 7.42 per cent in FY23.

As of December 2024, the shareholding pattern remains largely unchanged. Promoters hold 48.85 per cent, while Foreign Institutional Investors (FIIs) hold 24.69 per cent, slightly decreasing from 25.93 per cent in the previous quarter. Domestic Institutional Investors (DIIs) increased their stake to 11.96 per cent from 10.62 per cent. The public shareholding is at 14.51 per cent, showing a marginal decline from 14.60 per cent. The number of shareholders stands at 76,210, decreasing from 80,278 in the previous quarter.

With a PE ratio of 41.4x, the company trades at a premium compared to the industry PE of 27.4x. The company has ROCE of 28.6 per cent and ROE of 21.7 per cent.  

Investors must keep this Large-Cap stock on their radar.

Disclaimer: The article is for informational purposes only and not investment advice.