Supreme Industries – H1FY13 – still seems expensive

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

FY08FY09FY10FY11FY12H1FY13H1FY12Growth in H1FY13
Revenue1,3161,6612,0202,4742,9681,4321,255
EBITDA150244303362475204191
PAT549115619624210592
EPS3.96.412.315.419.08.37.2
Revenue growth26%22%22%20%13%
EBITDA growth63%24%19%31%7%
PAT growth69%72%26%23%15%
EPS growth64%93%26%23%15%
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

Conclusion

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.

Recommended Reading

Supreme Industries website – financials

Disclosure

As of the day of writing this update, I have an investment in Supreme Industries. Please read the disclaimer.

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