Supreme Holdings Reports 237.5% Net Profit Growth Amid Management Efficiency Challenges

Supreme Holdings & Hospitality, a microcap player in the construction and real estate sector, has recently undergone an adjustment in evaluation. The company reported very positive financial performance for the third quarter of FY24-25, highlighted by a significant growth in net profit of 237.5% as of December 2024. This marks a continuation of positive results over the last three consecutive quarters.
Key performance indicators reveal that Supreme Holdings has achieved its highest inventory turnover ratio at 3.57 times, alongside a peak profit after tax of Rs 4.32 crore. Net sales reached Rs 19.67 crore, reflecting a growth rate of 39.01%. Despite these encouraging metrics, the company faces challenges with management efficiency, evidenced by a low return on equity of 4.89%.

Additionally, while the stock has shown market-beating performance over various time frames, its long-term growth appears limited, with net sales growing at an annual rate of 0.42% over the past five years. The stock is currently trading at a premium compared to its peers, indicating a very expensive valuation based on its price-to-book ratio.

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