The Hindu Business Line : Betting on Supreme gains

Some players have begun market-making operation in Supreme Industries, betting on its value proposition in view of revenue as well as earnings growth and relatively low market capitalisation. The plastics and plastic product company has reported a net sales of Rs 1,162 crore in the year to June 30, 2007. Its paid up capital is Rs 27.62 crore. The stock closed at Rs 247.45 on Wednesday, a gain of around 10 per cent (weekly gain at 16 per cent), with a volume of 73,256 share s on the BSE. On the NSE, 41,222 shares changed hands.

Supreme is setting up a Rs 300-crore new unit, its 18th, at Gadegaon (15 kms off Jalgaon), the largest single-site plastic processing unit in the country. It is expected to complete the first phase of project work by October end, project manager, Mr P Desai, told Business Line over the phone.

Raw materials

According to the management, Gadegaon will manufacture plastic pipe systems from various raw materials like PE, PP PVC, and reinforced glass fibre, crates, furniture and foam from PP, PE and PS required for construction, insulation and packaging. After the full project implementation, scheduled for 2009-10, Supreme will have an installed capacity of 1.5 lakh tpa including a part of the existing plant at Jalgaon.

However, company officials declined to comment on the market talk that Supreme was developing 2 lakh sq ft at Andheri for commercial use. Market sources said the company is considering keeping one lakh sq ft for itself on the 2-acre Andheri land.

Supreme has entered into a toll manufacturing agreement with Kloeckner Pentaplast of Germany for supply of rigid PVC and PVDC film. The company has sold assets of Daman food service ware products plant. Supreme’s subsidiary, Supreme Petro, has also reported earnings improvement.

Jayanta Mallick

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