The Supreme Industries Limited (SUPREMEIND) Earnings Call Transcript
April 24, 2025
Earnings Call Speaker Segments
Ladies and gentlemen, good day, and welcome to the Supreme Industries Q4 FY 2025 and Full Year 2024-'25 Earnings Conference Call, hosted by DAM Capital Advisors. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Aasim Bharde from DAM Capital Advisors. Thank you, and over to you, sir.
Thank you, and good evening to everyone who has dialed in. We have with us the leadership team of Supreme Industries, who will take us through the Quarter 4 and FY '25 performance and post which we'll open the forum for Q&A. Thank you, and over to you, Mr. Taparia.
Thank you very much, Mr. Aasim. I'm M.P. Taparia, Managing Director of the Supreme Industries Limited. I, along with my colleague, Shri P.C. Somani, Chief Finance Officer; and Shri R.J. Saboo, Vice President, Corporate Affairs and Company Secretary, welcome all the participants who are participating in the discussion of the audited stand-alone and consolidated financial results for the quarter and year-end 31st March 2025. The stand-alone results and the consolidated results are already with you. I will give brief on company's product operating performance and other highlights. The company sold 674,510 tonnes of plastic goods and achieved net product turnover of INR 10,295 crores during the year under review against sale of 639,701 tonnes and net product turnover of INR 10,022 crores in the previous year, achieving volume and product value growth of about 5% and 3%, respectively. The consolidated operating profit and profit after tax during year under review amounted to INR 1,552 crores and INR 961 crores and it compared to INR 1,654 crores and INR 1,070 crores for the previous year resulting decrease of 6% and 10% respectively. The business scenario of all the product segment of the company for the year ended 31st March 2025 as compared to the previous year is under. Plastics Piping system business grew by 6% in volume and 2% in [indiscernible]. Packaging Products segment grew 10% in volume and 13% in value term. Industry Products segment business de-grew by 1% in volume and remained a flat level in value term. Consumer product segment business de-grew by 3% in volume and grew 1% in value term. The overall turnover of value-added product increased to INR 4,060 crores and compared to INR 3,748 crores in the previous year, achieving value growth of 8%. The company plans to spend about INR 1,100 crores towards CapEx during FY '26, including carry forward commitment of preceding year and acquisition of building and infrastructure business of Wavin in India. The CapEx plan also includes setting up plant at Kanpur Dehat for PVC profile and window, facility for PP silent piping SWR facility in Gadegaon and increase in capacity for O-PVC. CPVC pipe [indiscernible] at various locations. CapEx also includes addition of new product, SKUs and balancing equipment in respective product division. Entire CapEx shall be funded from internal accruals. This year concluded a normal business in all segments for the company except Plastic Piping System business principally due to much lower spending by central and state government on infrastructure compared to year FY '24, unseasonal rainfall in several parts of the country and extreme volatile situation of PVC resin prices, principal raw material price used by the company. The prices of PVC has changed 14x since July '24 and severely impacted the plastic piping industry. We are domestic economy-oriented company. IMD forecast for this year to have above normal rainfall. This will boost crop production and contain inflation. The reports coming about Rabi Crop harvesting is quite encouraging. Our country economy is well poised to have high growth in the current year in spite of uncertain global situation. The current Global trend for crude price, it will remain range bound at $65 to $70 barrel level. This will help the dollar rupee exchange rate remaining range bound without steep depreciation of the rupee. In the current economic situation, polymer prices, which is our principal raw material will also remain close to the current price level. Thus, the products made by the company will remain quite affordable. The company also expects better volume growth in Export market for its product portfolio given the tariff issues affecting other countries severely. The overall demand forecast for agricultural and housing sector is encouraging. The Central Government announced threefold increase in capital allocation in the budget for the year 2026 FY compared to money spent in the year FY '25 for augmenting drinking water supply. Country witnessed degrowth of around 6% in volume in Plastic Piping System and the company achieved a growth of about 6% in volume during the year under review in this business. The current year augurs well for the company on its business performance compared to the previous year. The company has 45 Plastic Piping Systems in the division and plans to add 5 more system in the current year related to various application substituting conventional material. The company continued to expand product portfolio with additional SKUs and system for various applications as required by our country's growing economy. To meet the growth in demand for piping products, the company initiated steps not only to do brownfield expansion at existing manufacturing site, but also exploring inorganic growth opportunity. The company has signed Memorandum of Understanding with Orbia Advanced Corporation, a global leader in plastic pipe and fitting. As per the agreement, company will acquire Orbia Wavin's pipes and fittings business in India and we have exclusive access to Orbia Wavin leading Piping technology for India and SAARC countries. The acquisition of Wavin would inter alia result in increasing the capacity of Piping Division by 73,000 tonnes per annum being operated from 3 manufacturing sites situated in Banmore in Madhya Pradesh, Hyderabad, Telangana and Neemrana, Rajasthan. The acquisition will facilitate catering to district areas of North and South India economically and efficiently. With all the CapEx incurred during the year under review, total installed capacity of Plastic Piping System Business has reached to about 8,70,000 tonnes per annum as on 31st March, 2025 as against installed capacity of 7,40,000 tonnes per annum as on 31st March 2024 and likely reach 1 million tonnes by end of FY 2026. The company putting up PVC Profile manufacturing with 5,000 tonne annual capacity and new acquired site at Kanpur Dehat along with window making facility at the same site. All requisite equipment have been ordered and work at the site in full swing. The company expect to start selling standard off the shelf and customized windows from July 2025. In Cross Laminated Film division, demand is now shifting back to the company from look-alike product, reflecting growing recognition of the company's superior quality and reliability. With substantial production capacity and a strong track record for timely delivery, the company is well positioned to meet the stringent requirement of government contract and expect continued business in this segment. All equipment required for the manufacture of Cross Plastics also has been installed and trial production is underway. The overall demand for plastic furniture is witnessing stagnancy, which is affecting the growth of Plastic Furniture industry in the country. The company plans to focus on growth from its Almirah Range as the penetration of this segment is still quite low and offers opportunity for growth. The company plans to launch 8 new models in the first quarter of 2025, 2026, which may result in overall growth in volume during fiscal year during FY '26. In Industrial Component division, automotive sector, commercial vehicles saw muted demand where it was better in the Passenger Vehicle segment. Similarly, Appliances sector, Air-Conditioning and Cooler segment witnessed good growth, though Washing Machine segment witnessed subdued demand. The focus of initiatives of this division remain mainly to spread the sector and customer base for Business growth and mitigate the dependency on few large customers which is yielding positive results. The Material Handling division has been reasonably well in Industrial customer segment with its effort of reaching new customers and constantly providing solutions with use of Plastics Pallets for warehousing and transit use, growth in injection and roto moulded pallets was good. The Composite Cylinder division experienced a challenging year with performance falling short of expectation. Business from company's major customer that is Indian Oil Corporation Limited did not materialize to the expected level. Discussions for new common designs are in advanced stage with the most popular 14.2 kilos standard size cylinder to be introduced by Oil Marketing Companies as they explore incorporating composite cylinder into their product portfolio. The company obtained certification for high-pressure cylinder for CNG application, making it a second company in India to offer type IV high-pressure cylinder. These efforts position the division for growth opportunity moving up the value chain. In performance Films division, the company remains focused on performance-based product offering, emphasizing high barrier segment penetration. With a strong focus on end user needs, this division offers a customized product portfolio designed to meet demanding application requirement. The Protective Packaging Division is putting its continued effort to remain in the business growth path. The focus of the division continued to develop customized solution, keeping end requirement in mind. The division is also expanding its fabrication facility in terms of capacities and geographical space to cater to the increasing opportunity for ready-to-use solution. Overall, all the division combined together, the number of distributors increased from 5,060 to 5,658 numbers end of 31st March 2025. The numbers of [indiscernible] points for Plastic Piping System has also crossed 200,000 numbers. This is a brief and overall summary for the quarter and year-ended review. Thank you for your patience. Now I and my colleagues, Shri P.C. Somani and Shri R.J. Saboo are available to reply to various queries raised by all of you. Thank you very much.
[Operator Instructions] The first question comes from the line of Shravan Shah from Dolat Capital.
Sir, a couple of things to understand. So last time, so the entire FY '25, whatever we started the year in terms of the volume growth guidance has kept on reducing and actually, we even deliver even much lower than what we discussed in the third quarter in the January. So just now trying to understand how are now we looking at in terms of the revenue volume growth and particularly the plastic pipe volume growth and the margin front for this year FY '26?
Overall, the revenue growth we anticipate turnover to around INR 12,000 crores this year. And Plastics Piping Systems, we expect our business to grow 3% to 4% more than the country's growth. Last year by unusual, we grew 12% over the country growth. Country had a degrowth of 6% and we grew by 6%. But this year, we anticipate will be a normal year. So country may grow by 7% to 8% in Plastic Piping Systems business and our company expect to grow 3% to 4% over country's growth.
Okay. So roughly around 10% to 12% kind of plastic pipe growth. And the overall volume growth combining everything would be how much are we looking at?
Similar range.
Sorry.
Similar range.
Okay similar. Okay. Okay. 10% to 12% range that we are looking at. And on the EBITDA margin front would be how much we are looking at for this year, FY '26?
Between 14.5% to 15.5%.
Okay. Got it. Now this number, whatever we are saying, this also includes the Wavin number that we will be consolidating once it will be over maybe by Q1 or Q2. So that includes -- this guidance number includes the Wavin number or this is without the Wavin numbers?
We hope that Wavin will be in our position from July onwards. So hoping that everything conclude by end of June, then we will have Wavin facility under our company for 9 months. And this includes 9-month Wavin capacity also.
Okay. Okay. And then sir, now how we are looking in terms of any update on the antidumping duty? And are we now seeing that the PVC prices are bottoming? Are we seeing any kind of improvement in terms of the channel level also? How would the demand now are shaping up?
I can't forecast anything about antidumping duty. It is between DGTR and Ministry of Finance and the High Court and Supreme Court of the country. I can't tell you anything. I don't know anything. But definitely, PVC prices have completely dropped too much, become very uneconomical, and we believe that will come close to bottom or it might have gone to bottom, may rise also after some time.
The next question comes from the line of Rahul Agarwal from Ikigai Asset Management.
Sir, 3 questions all on numbers. Firstly, starting with other expenses. I think seasonally, this number has to be higher. The quarter saw about INR 347 crores, which is lower both Q-o-Q and Y-o-Y. Which line item saw savings in cost, sir?
Can you again repeat the question?
Somani Ji, other expenses at INR 347 crores for the quarter, they appear to be very low. Seasonally, this quarter should see higher other expenses. Any one-off accounting has happened in this quarter, sir?
No, no accounting. You see other expenses, the major portion consists of freight and advertisement promotion. [indiscernible] advertisement expenses because [indiscernible] advertisement expenses. On plastic, [indiscernible] we controlled the advertisement expenses in last quarter.
Got it, sir. Got it. Second question, sir, on inventory loss. For the full year, sir, would you have a rough estimate how much was the inventory loss?
It should not be less than INR 150 crores.
Okay. Got it, sir. And lastly, the tax rate, it keeps on fluctuating every quarter. This quarter, it was 20%. Any one-off accounting there, sir?
No, nothing as specific that way. You see in the quarter where the dividend income is there, the tax rate will be lower because the dividend is exempt income in hands of Supreme. So you have to look at the company as a whole year.
Right. So full year, sir, it is about 22.4%. Any guidance, could you provide effective tax rate for consolidated entity for Supreme Industries next year, fiscal '26?
Fiscal '26 is very difficult to predict that way, but nothing unusual. Whatever is -- now you see we are now getting the reversal of the deferred tax. Earlier, we have created the deferred tax liabilities. To some extent, it is helping because now the depreciation in the books and the income tax is getting reversed. So this year also, there is a write-back of the deferred tax liability.
Okay. Okay. Got it sir. Got it. That's all from my side. I will come back and get back in the queue for more questions sir.
[Operator Instructions] The next question comes from the line of Praveen Sahay from Prabhudas Lilladher Capital.
Sir, my question is related to the SGP pipe and fitting in which you had mentioned 8 of your plants are manufacturing right now, the SGP pipe and fitting. So if you can give some indication how much is the revenue contribution from there? And which are the major uses applications you are currently working on?
In the so many locations, we are supplying to the trade market where we have secured that demand will be there. Definitely, our pipe is the top quality pipe in the country, and this is a very freight-intensive product. The goods are sold in coil form, starting from smart diameter 20 millimeter, 90 millimeter. So trade is a very big component. So that's why we put it more location. Volumes are small each of the location. Government department generally, we cater from our Gadegaon plant and Kharagpur plant, and Malanpur plant where the demand was low this year because the government buying was quite poor for Nal Se Jal scheme [indiscernible] last year.
So any contribution on revenue, sir, if you can?
Trade demand was quite okay. Trade demand was no problem, but trade is a small market for us, not a large market. It may be overall for the full year, may be around 18,000 tonnes.
Okay. Okay. Fine, sir. The next question is related to the protective packaging and where you had given around some 12% of volume growth with a 16% of value growth and ambition to reach INR 1,000-odd crores of revenue. So how big currently that their revenue is? And how much is the contribution in terms of volume in the entire packaging business?
Volume contribution largely comes from Packaging. Otherwise, [indiscernible] is very, very...
In packaging only.
Yes, it is part of packaging only. And if you look at the revenue numbers, it could be INR 850 crores plus [indiscernible].
Okay. So currently, it's INR 850-odd crores and you wanted to take it to INR 1,000-odd crores revenue by next year in this protective packaging? Right sir?
Yes, you are right.
I have some more questions, I will come back in a queue.
The next question comes from the line of Keshav Lahoti from HDFC Securities.
Sir, as now we have firstly want to understand more on the Wavin India acquisition side, what sort of volume you would be targeting in FY '26 and '27, what sort of margin we should build in what was the idea behind the acquisition? And more I want to understand the acquisition more from return ratio in by Supreme deliver industry-leading kind of return ratios of 25%. What kind of ratio normalized ratio maybe 2, 3 years down the line this acquisition can deliver?
Too many points -- What you want to ask either, too many points you are asking. So be clear what you want to know from us. Please tell us.
Sir, I want to know more from the intent like Wavin India acquisition, what sort of growth management have in their mind what was the idea behind the acquisition?
Wavin has got capacity of 73,000 metric tonnes. Normally, we use 70% capacity. So with 73,000 tonnes, full year basis you may share 51,000 tonnes volume annually with the capacity what they have installed. Apart the volume what we are going to use from the capacity, now we have got exclusive access for India and SAARC countries of all the technology which they have and Wavin portfolio and also the new technology [indiscernible] also will be available to our company. And Wavin is a great company in building infrastructure business. We will share our technology in their portfolio, and we are going to add some of them in our product profile going forward.
Okay. Got it. And what kind of EBITDA margin in this Wavin can do?
Currently, whatever EBITDA margin we are getting the same will come to the present portfolio is just like our company product portfolio.
Understood. Got it. So by FY '27, its margin would be in line with the Supreme margin. And we hear that Wavin India 2 plants are on lease. So what kind of lease is it? How big the lease is?
Lease may be around INR 50 million annually.
How many years?
It is 7 to 9 years.
Got it. Understood. I will come back in queue.
The next question comes from the line of Pujan Shah from Molecule Ventures.
So my question pertains to O-PVC. So we have procured O-PVC equipment lines from a domestic equipment supplier. So just wanted to know the feedback and do we plan to or intend to grow with the domestic equipment supplier or the Spain technology player?
When we purchased the company, they had the plant from [indiscernible], Spanish company. And we purchased many more line from the same company, which is supplied from Europe. And we are very closely associated with that company, and we have got further more lines and more lines are going to come next year also -- for this year also. Some line came last year, more line will come this year. So we are buying the lines from the Spanish company.
So what I wanted to understand is that we have been planning for 9 lines coming 3 months due to supply trends from the [indiscernible] technology. So just wanted to understand, they have expanded the capacity so that we are getting the equipment ahead of the desired time line?
Over a period up to 2028. So it is now 2025 only.
I didn't get you, sir.
All the line what we ordered were to come up to the year 2028.
Okay.
Now it's 2025.
2025.
[indiscernible].
All the lines will be commissioned in 2025 calendar year, right?
I said all the lines will be commissioned by 2028.
2028.
Lines are coming and we will be installing and running them.
Okay. Got it. Got it. And sir, understanding the Wavin technology, so they also capability in the O-PVC. So are we have any plans in terms of scaling and leveraging their technology and trying to intend into market via Wavin?
For larger diameter, we are entered into with [indiscernible].
Okay. So more or less, we will be with the [indiscernible] as of now?
The next question comes from the line of Sneha Talreja from Nuvama Wealth.
Just two questions from my end. Firstly, going ahead with your capacity expansion, like you said that you're looking at a growth of about 11%, 12-odd percent, which includes outperforming industry. Just wanted to take a sense why are we then adding capacity by 15% to 18-odd percent? Like each year, we are seeing capacity expansion close to about 15% to 18-odd percent.
No Ma'am, you see capacity expansion takes time and then this year, the capacity expanding -- is increasing because of the Wavin acquisition. So the 70,000 tonnes will come automatically from the acquisition point of view. Otherwise, our brownfield expansions are not that heavy.
And apart from that, we are going to new line window and door. And for that, we invested around INR 200 crores.
She's talking plastic piping particularly.
Plastic piping. Okay. Okay. We are investing money in our other segment also.
Sir, I got that. So in that case, we can assume that Wavin volumes sales will be over and above your capacity addition, I mean, in terms of whatever guidance you have given?
In that guidance, Wavin capacity is included.
Yes.
You're saying volume growth of 11% to 12-odd percent with Wavin acquisition versus your capacity addition in FY '25 itself is 18%. And again, you're planning around about 15% capacity addition in FY '26.
[indiscernible] you are mixing too many numbers.
No, no, the addition of capacity addition in '25, '26 is inclusive of Wavin addition. So from 8.7 million when we are taking close to 1 million, that includes 73,000 tonne capacity of Wavin also in the current year.
Understood, right, sir. But that is close to about 30% plus if I put together both these years. And we are talking volume growth of 12-odd percent. So that's what I was just trying to get the sense from...
We have [indiscernible].
We have grown by -- last year, we've grown by 6%. And this year, we say we will grow 3%, 4% more than the country growth and country may grow between 8% to 9%. So we may grow plus 12% to 13% further. So combined 2 years, the growth will be more than 20%.
Understood, sir. This was really helpful. Sir, my second question was related to our margin guidance where we have said 14% to 15%. On the contrary, we have also said that Wavin comes with certain losses at this point of time. Of course, you'll be converting into a profitable company equal to you, but that will happen gradually by FY '27. Despite these scenarios, we are still aiming at 14% to 15% margin. So just wanted to take a sense from where are you expecting additional margin levers? What could be those levers?
We anticipate overall 14.5% to 15.5% overall of the company, not Piping division alone. We have told you the operating margin of the company, INR 12,000 crore turnover of the company around and 14.5% to 15.5% operating margin, but that the product portfolio, not only plastic pipe.
Understood, sir, but that was 14% this odd year and that was 15% last year. That means we are not expecting any decline in terms of margin despite Wavin.
[indiscernible] Wavin will not damper our balance sheet.
[indiscernible] rental we are paying yearly INR 5 crores after all it is not a big rental amount.
Okay, sir. Just lastly, if at all, I may with respect to Wavin itself, what kind of products Orbia and Wavin will come into India and how much margin accretive are those products versus our existing product profile of...
Yes, classified information. We will not declare what are the new products we are going to add from the technology, it is classified.
The next question comes from the line of Kumar Saumya from AMBIT Capital.
My question in terms of last quarter, we had plans for 2 greenfield plants as well at Jammu and Bihar. So are these plants -- are we postponing these plans? Or are we sticking to it? Just that question.
Yes. For the timing, we have deferred the execution, Patna and Jammu.
We are actually awaiting the industry policy, they were to announce the industrial incentive policy for putting industry in Bihar that announcement did not come. We now are being advised that it may come close to election time. And Jammu, we are looking for a larger piece of land. So we got a 10 acre land, purchased from government -- privately, but we applied to government for 21 acre land and we expect that the land from government may be allotted to us. So if we are able to get access to a larger piece of land, then we will like to put a plant in a larger area, not a smaller area. So we are waiting for both the policy taken by government of respective state. So for that, we have to wait.
The next question comes from the line of Aditi from CD Equisearch Private Limited.
So my question is like despite the increase in affordability of piping products, why has volume not picked up?
What is it? Why volume is not picked up. Ma'am, because of the falling prices continuously for the last 8 months, the market sentiments are very negative. But there is...
They were last year, this year, the volumes are going very well.
Yes. She is asking for the last year, '24-'25.
Last year pressure highly none. If the price fell by INR 22 kilo between second half July to March end, the pressure drop in. So there was huge destocking taking place toward the chain, retailer, semi-wholesaler, wholesaler.
The next question comes from the line of Sonali from Jefferies.
This is Sonali. Sir, I have 2 questions. Firstly, could you quantify the inventory loss because of the PVC fall this quarter in Q4 and the full year FY '25, please?
We can tell, on a full year basis, we believe that the company might have lost INR 150 crores in plastic piping division due to the fall in PVC prices. And fall in polythene pipe price also. So across the board all the polymer pressure has gone down. And we are using PVC, polythene, we are using CPVC, we are using PP for raw material and they were -- we were in each of the polymers. So combined we believe that we might have lost INR 150 crores in inventory loss.
Understood. Sir, my second question is any color you could shed on CPVC volume and value growth for either Q4 or full year FY '25 as a whole?
CPVC business, we added 21% volume growth.
This quarter or full year?
Full year.
Okay. That's good to know, sir. And lastly, Jal Jeevan, drinking water mission. How much does it contribute to your top line overall from a full year perspective? I do remember you mentioned some 18,000 metric tonnes. Is that for Jal Jeevan that you mentioned?
It is 18,000 in trade market. Jal Jeevan business had a very, very slow spending last year, mostly we're supplying to Maharashtra government and Maharashtra government stopped placing any order. So we had a very small business in Jal Jeevan last year.
So to the overall sales, is it fair to assume it contributes less than 5%?
Yes, yes, less than 5%. Very small business. We are not a big player in infrastructure anyway. But whatever play we had, we had degrowth last year.
Understood. Sir, and just 1 last question. How is the uptick in Agri and residential so far in this quarter?
This quarter has just started.
I mean by YTD, sorry.
Last quarter.
For previous year, you're talking about '24-'25?
Yes, sir. That is right. In fact, Jan to March or Jan to April.
Jan to April, Housing and agri?
Yes.
[indiscernible] growth in the quarter. Benchmark 2% -- 1% to 2%.
Yes. So in spite of infra not being there, we had a growth of 2%. So it means agri and housing were doing quite good.
The next question comes from the line of Navid Virani from Bastian Research.
I have 2 key questions regarding the recent acquisition that we are announcing for Wavin. So firstly, can you help us understand what kind of white spaces in terms of technology or products are we being able to fill with this acquisition?
We see Wavin India business is similar to business what we have but their parent company is very large, and they have the technological development.
What question he asked?
Wavin, how it will be helping us?
We will be -- I mean, technology will be developed, there were many technology in their portfolio, which we like to develop in Indian market.
Okay. And can you just give us a sense on the kind of opportunity size these technologies put together will have? If you have anything from that?
Definitely, it will give us some new applications, we'll be able to operate better solution for many requirements in our country with Wavin technology.
Okay. Okay. And one more question is on -- so now once we acquire Wavin, what will happen to the brand? Are we going to -- is the brand going to get subsumed under the company?
No. Market product, we will deal upon the technology, we will printing made with the Wavin technology, otherwise goods will be sold with Supreme brand.
Okay. And sir, what will be the final cash outflow for the acquisition, if you can comment on that?
We need to pay them $30 million and plus whatever working capital they are involved.
What will be that figure totaling to?
$30 million the day when we pay [indiscernible] pay.
The next question comes from the line of Rajat Setiya from ithought PMS.
My question is about the OPVC pipes. So we are also hearing that a lot of Chinese and Indian companies are entering. I wanted to ask you, are those companies successful in terms of launching their OPVC pipe -- OPVC line?
We are not aware. We are not aware. We are not aware any of the product machines are making goods. We can meet our specifications, and we are sharing with our suppliers.
Okay. We will only stick to Molecor. Nobody else?
As of today, yes.
Okay. And sir, in terms of -- given, I mean, our channel check suggest that there are a couple of companies which are entering but we don't understand right now that is there any criteria as per the state government tenders and all that, that will restrict any sub quality player? Or anybody can just bid there?
How can I tell you about the government policy. We made a product which is very much to the specifications required by the various department. We are offering the solution which either equal or better than DI pipe what they are using.
Sure, sir. And sir, finally, has the demand picked up again in the OPVC side? Or we are still looking at the [indiscernible].
As on today, we are a very small player, small capacity, and we are able to market by and large. We have a very small capacity today.
Yes, sir, right. So overall demand, I mean, the industry level tenders and all, are they picking up?
Our company, we are able to sell our goods.
The next question comes from the line of Utkarsh Nopany from BOB Capital Markets Limited.
Sir, my first question is on your revenue growth guidance part. Sir, if we exclude the revenue contribution of the win acquisition, so in our sense, like it is currently generating close to around INR 650 crores annual revenue. Then we are just targeting a revenue growth of only 8% to 10% for FY '26. So I wanted to know why we are expecting such a muted revenue growth despite steep increase in our organic annual CapEx run rate from INR 500 crores in FY '24 to around INR 1,000 to INR 1,100 crore in FY '25 and '26.
You see our revenue for the year was INR 10,400 crores, which we are targeting to around INR 12,000 crores for the FY '26. And so far Wavin is concerned, their revenue for '24 was -- of piping business I'm talking, was close to INR 500 crores. And when we acquired Wavin say in July, we'll have only 9 months at the most for operating period. So we cannot take the annual revenue what they used to have because we will not be having full year this year.
Okay. And sir, how much generated revenue in FY '25?
FY '25, then they are running the business. We are not the -- they do business on calendar year basis.
And when I'm saying '24, that is December '24, Jan to December '24.
Okay. And sir, like for the Industrial segment, can you provide the rationale why we are seeing a decline in our industrial sales volume for the past 3 consecutive quarter?
You've seen earlier years, there was a nonrecurring business of electronic voting machine. Due to the elections in the states and the central, there was a large quantity of the volume was supplied for the electric voting machine, which is missing in the current year. So the year which has gone by.
Okay. And sir, lastly, sir, can you please provide the nonpipe segment capacity breakup also for March '25 and how much we are expecting at the end of March '26. That is for industrial, consumer and packaging.
Yes. For '25, although we have given our presentation, but still for your sake of your -- I will give the break up of capacity. As of March '25, piping segment has a capacity of 872,000 metric tonnes; industrial Products, 91,000 metric tonnes; packaging product, 101,000 metric tonnes and consumer product, 27,000 metric tonnes, all put together, 10,91,000.
And sir, how much we are expecting in March '26 for nonpipe segment?
By piping, we are targeting 1 million tonnes. Other segments, profile may come in 5,000 tonnes. Other segments, very minimal capacity. So the major capacity will come in plastic piping only and the window profile of 5,000 metric tonnes.
The next question comes from the line of Rudraksh Raheja from ithought PMS.
With regards to OPVC pipes, how is the demand for new tenders?
I repeat again, we are a very small player, and whatever we are producing we're selling.
Sure, sir. And sir, any idea how many states today accept OPVC in their tenders? And are there more states that are adopting OPVC?
We are registered, I think, in more than 12 states already and other states, because of the capacity, we don't have much capacity, so we are going slow also. 12 states also quite a large number for our capacity.
Understood, sir. And sir, how big is the opportunity?
This will be approved by all the states. There's nothing great about it. All the states would like to buy OPVC pipe for small diameter, if its economical than DI pipe.
Yes. Okay. And sir, regarding the opportunity size, do you see OPVC taking away 30%, 40% market share of DI pipes market?
DI is a big market, business market with large diameter, OPVC selling mostly up to 400 millimeter. DI pipe use up to 1.2 meters, 800 millimeter, they are large size and large volume. DI is a very different size combination. Major sale of DI is around large diameter.
Got it, sir. Got it. And sir, is there enough supply of OPVC lines to meet the expected demand in the industry?
We are not a big players. There is nothing at our end.
The next question comes from the line of Akash from UTI Mutual Fund.
Sir, all my questions are answered.
The next question comes from the line of Manish Ostwal from Nirmal Bang Securities Limited.
I have only one question on the composite cylinder division. We mentioned in our press release that this year was challenging and the performance were below expectation. How do you see the business to perform in F '26? And what is the update on this order from the IOCL side? When we can expect this order to come?
Two, three things for the current year. One is BPSL has also floated tender for 4 lakh pieces. So apart from IOCL, now BPSL is also now coming to market for procuring these composition lenders. It is a good initiative for our purposes. IOCL is now planning to float a tender for about 1 million pieces is what we learned from our interactions. And all the oil marketing companies are working for a common size of 14.2 million cylinder. So if all those things get materialized then definitely, will be a good sign and good year for the division.
So over the medium term, so what size of opportunity is a market we can see for Supreme Industries? What is the size of opportunity here?
Right now, we have a capacity of only 1 million cylinder. And we don't have any plan to expand as of now. First, unless we utilize it appropriately we are not looking for a new expansion.
What is the utilization, sir, right now?
Right now it's hardly 50%.
The next question comes from the line of Vipul Kumar Shah from Sumangal Investment.
My question also relates to composite cylinder. So you have mentioned that performance falling short of expectation. Is it the technical operational performance? Or you're just mentioning your business performance?
It's the business performance. Nothing about technical, everything is well established, well appreciated.
It's a far superior product.
Okay. Far superior product.
Because there is no possibility of anybody dying, take a blast, will burn out there is no possibility of any death. Every year, several people die due to the blast in cylinder. In our cylinder, there is no blast, which will only burn out, not a blast.
So why we are not able to scale this business, although we have a far superior product?
Ask OMC, oil marketing company. They do decide.
Okay. So our cylinders are priced here? I mean the cost wise, they are much costlier? How we compare cost-wise, sir?
They are saving life, what is costly. When we say our cylinder save life, then it is costly.
The next question comes from the line of Swati Jhunjhunwala from JM Financial PMS.
Sir, my question is largely broad based. So pipe industry in general has been facing headwinds in the last few quarters because of the PVC prices. So looking ahead, are you seeing demand coming up? Or are you seeing that PVC prices will now normalize or go back up? Or are you seeing whether Maharashtra will come up with new tenders for Jal Jeevan since that is the [indiscernible]?
About the government policy of tender calling or not calling, but we know very certain that the destocking took place last year. So the destocking is to start. So this year is going to be good year for plastic piping system business growth.
Right. That is -- so do you see that happening anytime soon the restocking at your anticipated? Do you see that happening?
Yes, there is good demand coming this month.
Okay. Got it, sir. And any update on Jal Jeevan, I mean, have you seen any pickup yet in any other states, if not Maharashtra even if you don't operate there, is there any pickup that you see till now?
Government announced budget proposal 3x than what they spent last year. Central government made a provision of INR 67,000 crores for Jal Jeevan, last year they spent INR 22,000 crores. And we are not very active player in this business. We are a smart player. So Maharashtra, we know that they have not announced buying piping system for Jal Jeevan. In Maharashtra, they have not still started.
The next question comes from the line of Pujan Shah from Molecule Ventures.
Just wanted to understand that as per the government direction, we are planning to complete Jal Jeevan bye 2028. And we are expanding our OPVC line by 2028. So what we have been envisioning? So we have been planning to open up into new industry segment, which would help to consume that OPVC? So how we have been looking at after 2028?
DI pipe are used for many other application for irrigation and so these pipes -- there are many other application apart from Jal Jeevan. Jal Jeevan started only last 3, 4 years before. DI pipe is running for many years already. DI pipe is required by so many municipalities also for replacing the old pipes.
Right, right. But sir, ultimately, all the demand, which has been for the OPVC right now is from JJ. So just wondered on that.
You know better then. We don't know. I think, only from Jal Jeevan, we are not told like that by anybody.
Got it, sir. And sir, just wanted to clarify on the -- so the expansion of lines will be on 2028. So why we are procuring -- is it due to the slowdown, which has been affecting us to get earlier or is it just our strategy to get into [indiscernible]?
Capability produce machine, that capability how many machines they can produce every year.
Okay. Okay. So that's the challenge we have been facing due to that?
Not challenge. They have terminated us also.
Payment flows?
Convenient to us, we have to put the machine based on that growth, but I can perceive for my company. I don't want to invest money and then keep [indiscernible] either.
The next question comes from the line of Samyak Jain from Marcellus Investment Managers.
Just one question. So what would be the CPVC mix in our overall piping business for this fiscal F '25?
Sorry?
CPVC mix.
It's a classified information.
The next question comes from the line of Keshav Lahoti from HDFC Securities.
I just wanted to get a sense, so in TV interview today, you mentioned something like 12% volume growth in April. So this was industry growth you're mentioning or [indiscernible] growth? And secondly, this is growth due to primary sales or fillings of channel inventory? How should we read it?
The 12% volume growth, you see, we were...
What 12%?
In TV interview -- he is referring to TV interview today, the volume growth, what we have spoken, what you have spoken...
Country degrowth of minus 6% and we have grown 6%, so we are 12% better than the country. Country is 6% degrowth in plastic piping system by volume last year and our company grew 6% by volume last year. So based on the country growth, we have grown 12% better than country growth. This is what I told in the TV.
Okay. Sir, you have mentioned something on April, since how has been the demand growing?
April still has 8 days to go. [indiscernible] too fast.
The next question comes from the line of Mudit from M3 Investments.
I just know about the antidumping duty status. There was a notification and then it was paused. So are there any at the moment on PVC?
No, no, no. Notification to come. Digital [indiscernible] to issue the final finding, their provision finding already came and the final finding is still not come. So we are waiting when the Digital [indiscernible] announce the final finding. Before final finding, nothing is going to happen. So we are waiting.
Right. And was there resistance from CPVC manufacturer in India that they have put a case that was...
You asked a question from the raw material producer.
The next question comes from the line of Manish Mahawar from Antique Stockbroking.
Yes, just 2 questions. One in terms of the industry, when you say the industry have declined minus 6% last year, and we have grown 6%, what were industry size total, in terms of tonnage?
Total tonnage in industry?
Yes, sir, industry size.
Plastic bag sale last year, it was 4.29 million tonnes.
4.29. And you are expecting it will grow by 7% to 8% this year, right, sir?
This is normal. Normally, it should grow slightly better than the country's GDP growth. The most specific estimate up until now is 6.2% GDP growth in the current year. This is a forecast given by so many experts. So we believe if the country grew by 6.2%, the plastic pipe business volume should grow better than country GDP growth. This is our experience of previous years. So it should grow by 7%, 8%, something better than the GDP growth.
Understood, sir. And sir, in terms of this 4.29 million metric tonne, what you said in the piping, what is the -- sorry, sir?
4.29 million tonne plastic piping system consumed polymers.
Okay. Understood. And sir, secondly, in terms of one of the comments you made consistently, there's a 14 or 15x price have declined for PVC, right? And that led to a destocking in the channel. So do we have any -- can you give some sense how the channel inventory at the moment versus the normal?
Channel is a huge channel, but we believe that because such a large destocking, they have to come back to proper destocking this year for sure. This is normal business item.
The next question comes from the line of Shravan Shah from Dolat Capital.
Sir, just trying to understand the math. When we say that the industry plastic pipe will grow at 7%, 8% and we will do a 3%, 4% higher. So let's say, a 12% on the higher side. So last year, FY '25, volume is 5,31,000. If I do a 12%, will come at around 63,700 and in that Wavin, if I consider 70% utilization for 9 months, it comes around 38,000. So the -- on the core front, we would be growing by 25,000 tonnes in '26, which is a kind of a less than 5%, 4.8%, which is lower than the 6% of the FY '25. So just trying to understand where am I missing?
Shravan, show me your number, dear friend. Give me your number. You are talking company growth. I gave you small company. You are questioning our capacity. Our capacity I already gave, 8,75,000 tonnes. Wavin capacity is 73,000 tonnes. 73,000 in 9 months, they cannot produce more than 55,000 tonnes. Normally, you can run only 65% capacity, so which means only 36,000 tonne of Wavin. But you are talking volume -- we are invested in our company capacity, which are really 8.75 million tonne PVC plastic pipe system.
No, no. His question is -- just let me repeat the question to him. Out of 5.7, if we say 12% then we need to [indiscernible].
Which 12%? Last year?
No. Current year.
Current year, I never told any percentage.
No. Industry growth is 7%, 8% and we grow [indiscernible].
Maybe yes. So yes, we will grow to 600,000 tonnes, right?
So out of which Wavin will [indiscernible].
No, no, out of 600,000, 25,000 to 30,000 will be Wavin.
This is what he is trying to know.
If Wavin is not there, I can achieve 600,000.
So sir, that's what I wanted to understand if the Wavin is not there as you are saying, then you can achieve a 6 lakh kind of a volume. So with Wavin, it should be up 6.35 lakh, 6.40 lakh. So then the growth number...
Yes. It may be.
Yes. So then the growth number would be much, so that's the only thing I wanted to understand that the...
Might be at 13%, 14%, depends on how the market demand comes. We are equipped. We can meet the demand of the market.
As there are no further questions, I will now hand the conference over to the management for their closing comments.
Thank you very much. We are very thankful to our investors and the analysts who raised very intelligent questions. We thank all of them for their time and the questions raised by them. We thank all of them. Thank you very much.
Thank you, team DAM. Thank you, everyone.
On behalf of DAM Capital Advisors, that concludes this conference. Thank you for joining us. You may now disconnect your lines.
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