Supreme Industries stock slips on weak Q2 showing

Brokerages cut earnings estimates after firm disappointed the Street

- RAM PRASAD SAHU

The stock of Supreme Industries, the country's largest plastic pipe maker, has shed 22 per cent since its highs in October. The September quarter results were below expectations as the volatility in polyvinyl chloride (PVC) resin prices led to a major destocking across the trade channel.

PVC resin prices saw a 19 per cent rise during the June quarter, which was followed by a 17 per cent fall in July and August.

Given the near-term outlook, the company revised its guidance for volume growth of plastic pipes to 16-18 per cent from 25 per cent. The management cited volatility in PVC resin prices, lower spending on infrastructure by the governments, and extended monsoon as reasons for the lower guidance.