SUPREMEIND

(SI) Q1FY26 volume growth was 5.7% below our estimates, due to lower volume in the plastic pipe segment (up 6.1% YoY against our est. of 7.3%) due to early monsoon, leading to lower demand in the agriculture piping segments, delay in ADD on PVC resin resulted de-stocking in the channels. EBITDA margin contracted by 250bps YoY with decrease in EBIT/kg to Rs 10.6 (down 35.9% YoY) in pipe segment mainly due to inventory loss of Rs 500mn. Adjusting for the inventory loss PAT was in line with our estimates in Q1FY26. The management has revised its FY26 guidance, raising P&F volume growth from 10–12% to 15–17% and overall volume growth to 14–15%, while maintaining its EBITDA margin guidance at 14.5–15.5%. Also maintained its plastic pipe segment capacity to reach 1mn MT by FY26. Considering the current PVC resin price scenario, moderate demand environment, and slowmoving channel inventory, we have decided to maintain our FY26/FY27 estimates, with P&F volume growth of 12.4%/15.0% and EBITDA margins of 14.2%/14.5%, ***** FY25-27E revenue/EBITDA/PAT CAGR of 14.3%/17.7%/19.8%, with overall volume CAGR of 12.4% and EBITDA margin expansion of ~80bps.