01 — At a Glance
The Pipes Are Clogged With Red Ink
- 52-Week High / Low₹4,740 / ₹3,020
- 9M FY26 Revenue₹7,582 Cr
- 9M FY26 PAT₹520 Cr
- 9M FY26 EPS₹41.65
- Annualised EPS (9M×4/3)₹55.5
- Book Value₹450
- Price to Book8.76x
- Dividend Yield0.86%
- Debt / Equity0.06x
- Interest Coverage47.0x
The Mess In One Sentence: Supreme Industries closed 9M FY26 with 10% volume growth but a 22% PAT collapse because PVC and polyethylene prices fell like a sack of rocks, creating ₹100–120 crore in inventory write-downs. The stock trades at 61.6x P/E (vs. 21x sector median) despite profits diving, and management is betting that the price deflation floor is behind them. Betting is not the same as fact.
02 — Introduction
The Plastic King In A Polymer Downpour
Welcome to the story of Supreme Industries Limited — India’s largest plastic products manufacturer and the undisputed emperor of plastic piping systems (67% of revenue, 51% market share). For the past decade, this company has been a textbook example of compounding wealth. Consistent 13–15% revenue growth. Rock-solid 22% ROCE. Almost zero debt. Dividend payout of 36–45% annually. The kind of business that makes fund managers nod sagely and sleep well.
Then 2025 happened. And with it, a polymer pricing apocalypse.
PVC prices (the backbone of Supreme’s piping business) fell from ₹80+ per kg to much lower levels. PE and PP followed suit. Raw material costs collapsed, which is wonderful for consumers and terrible for companies holding inventory. In the nine months ending December 2025, Supreme took a ₹100–120 crore inventory loss due to revaluation of raw materials and finished goods. That’s not a typo. That’s equivalent to 19–23% of the nine-month PAT being wiped out by polymer deflation alone.
Volume grew 10% (respectable). Revenue grew just 3% (deflation at work). PAT fell 22%. The stock now trades at 61.6x P/E — an absurd multiple for a company whose earnings are getting demolished by raw material volatility. Yet the narrative is “the worst is over.” Let’s examine that claim with cold numbers.
Management’s Take (Jan 2026 Concall): “Price erosion has been arrested. And price has started going up.” PVC world booking moved from ₹580 ($6.95 per kg) to ₹640+ ($7.65 per kg). Management credits petrochemical plant closures in China and the rupee depreciation as supportive tailwinds. Are these real? Partly yes. Are they permanent? Nobody knows.
03 — Business Model: WTF Do They Even Do?
Pipes, Films, and the Relentless Search For Upside
Supreme operates in four main segments, each serving a distinct market. Plastic piping systems (67% of revenue) is the crown jewel — uPVC pipes, HDPE systems, injection-moulded fittings, and specialty plumbing solutions for residential, agricultural, and industrial end-users. The company holds a stranglehold on distribution, with 6,451 channel partners and 35 manufacturing plants across India. In industrial piping, they compete with regional players. In residential plumbing, Supremacy is near-total.
Packaging products (16% of revenue) — protective films, cross-laminated materials, insulation products — grew 13% YoY in 9M FY26, driven by better product mix. Industrial products (13%) — crates, pallets, composite LPG cylinders — expanded with a new BPCL order for 2 lakh cylinders worth ₹54 crore. Consumer products (4%) — furniture, storage, moulded goods — is expanding slowly but remains a rounding error.
The real competitive advantage is not in the products themselves (plastic pipes are commodities), but in distribution depth and the ability to pass through raw material price swings to customers. In theory. In practice, deflation hits faster than inflation, and inventory losses remain. This is a working capital intensive business masquerading as a high-ROCE cash cow.
Piping Segment67%Revenue Mix
Packaging Segment16%Revenue Mix
Industrial Segment13%Revenue Mix
Consumer & Other4%Revenue Mix
Capacity Play: Supreme has 10.92 lakh MT installed capacity across all segments. In 9M FY26, they sold 522,018 MT of products — a 47.8% utilization rate. Management targets 70% utilization, which would imply ₹1,100–1,200 crore in additional annualized revenue at current realizations. The Wavin acquisition (₹302 crore for Orbia’s piping business, July 2025) added 71,000 MT capacity and three plants. Ramp-up is underway, but Q4 integration will be closely watched.
💬 At 8.76x price-to-book and 61.6x P/E, do you see value here or a value trap? What’s your thesis on plastic pipes in an inflationary/deflationary cycle?
04 — Financials Overview
Q3 FY26: The Profits Keep Shrinking
Result type: Quarterly Results | 9M FY26 EPS: ₹41.65 | Annualised EPS (9M×4/3): ₹55.5 | Latest Q3 EPS: ₹12.07
| Metric (₹ Cr) |
Q3 FY26
Dec 2025 |
Q3 FY25
Dec 2024 |
Q2 FY26
Sep 2025 |
YoY % |
QoQ % |
| Revenue | 2,687 | 2,510 | 2,394 | +7.05% | +12.2% |
| Operating Profit | 314 | 309 | 297 | +1.6% | +5.7% |
| OPM % | 12% | 12% | 12% | Flat | Flat |
| PAT | 153 | 187 | 165 | -18.2% | -7.3% |
| EPS (₹) | 12.07 | 14.72 | 12.97 | -18.0% | -7.0% |
The Damage Report: Q3 FY26 revenue grew 7% YoY, but PAT fell 18% YoY because operating margins at 12% reflect a full quarter of polymer deflation impact (though management says Q3 “caught the bottom”). The operating profit stayed flat YoY despite 7% revenue growth — a margin compression story playing out in real-time. Nine-month PAT of ₹520 crore vs. ₹667 crore last year (22% down). Inventory losses of ₹100–120 crore are the culprit; without them, 9M PAT would be ₹620–640 crore (roughly in-line with prior year despite revenue being down 3% in absolute value).
05 — Valuation: Fair Value Range
Is 61.6x P/E Fair Or Fever-Dream Territory?
Join 10,000+ investors who read this every week.
