In this article I will share an update on Supreme Industries Ltd. I have done a stock study on Supreme Industries earlier. If you have not read it before, you can access it here.
Supreme Industries – Financials
|FY08||FY09||FY10||FY11||FY12||H1FY13||H1FY12||Growth in H1FY13|
|Operating margin – EBITDA (%)||11%||15%||15%||15%||16%||14%|
|Net profit margin – PAT (%)||4%||5%||8%||8%||8%||7%|
Supreme Industries – Observations
- Operating profit growth or EBITDA growth has dipped compared to first half year results for FY12. But PAT growth is higher than EBITDA growth because finance costs have come down.
- Revenue growth, EBITDA and PAT growth is lesser than that in past years.
- Margins have slightly come off past levels.
- The first half of the financial year for Supreme Industries (financial year ends in the month of June) is usually slower in terms of sales. Past data for three years shows that they make 40% of their annual revenue in the first half and 60% in the second year.
Supreme Industries – Valuation
- Supreme Industries did Rs. 11.8 EPS in H2FY12.
- In H1FY13 they have done Rs. 8.3 EPS.
- Total EPS for the trailing year is Rs. 20
- Current market price as of 8 February 2013 is Rs. 318.
- Price to earnings (P/E) on trailing basis is 318 by 20 yielding 15.8
It still is trading at the higher end of the P/E band seen in the last 5 years. It seems slightly expensive to me as I wrote even in the earlier stock study on Supreme Industries. I would not sell yet but not buy either.
As of the day of writing this update, I have an investment in Supreme Industries. Please read the disclaimer.