Supreme Industries shares fall 4% after cuts to price targets on volumes, margins worries

Shares of Supreme Industries Ltd. were trading over 4% lower on Tuesday, October 28, after the company's September quarter earnings fell short of expectations, prompting brokerages to slash price targets and turn cautious on margins.

Global brokerage CLSA maintained a 'Hold' rating on Supreme Industries but cut its price target to ₹4,275 per share, citing a weak Q2 performance marked by a 7% year-on-year decline in EBITDA.

Volumes grew 12% YoY, partly aided by the Wavin acquisition (organic growth at 10%). The company has guided for 12-14% volume growth and 14.5-15.5% EBITDA margin for FY26.

Management expects a demand recovery in the second half of the year, driven by agriculture and infrastructure segments, but CLSA mentioned that margin expectations "look tough to be met."

Nuvama Institutional Equities also trimmed its price target to ₹4,356 from ₹4,614, citing weaker-than-expected margins.

The brokerage said Q2 was impacted by a prolonged monsoon, weak agri and infra pipe sales, and operating deleverage.

While Supreme retained its pipe growth guidance of 15-17%, it lowered overall volume growth guidance to 12-14% from 14-15% earlier.

Nuvama has cut its EPS estimates by 14% for FY26, 8% for FY27, and 7% for FY28 on the back of margin pressure and a cautious outlook.

The Board of Supreme Industries has declared an interim dividend of ₹11 per share for the financial year 2025-26. Record date for the said dividend has been fixed on November 3, 2025.

Shares of Supreme Industries are now trading 3.5% lower at ₹3,861.10. The stock has declined 18% so far in 2025.