Supreme Industries Ltd is Rated Sell

Current Rating and Its Significance

MarketsMOJO’s 'Sell' rating on Supreme Industries Ltd indicates a cautious stance for investors, suggesting that the stock may underperform relative to the broader market or its sector peers in the near to medium term. This rating is derived from a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. Each of these factors contributes to the overall assessment of the company’s investment appeal.

Quality Assessment

As of 09 January 2026, Supreme Industries Ltd maintains an excellent quality grade. This reflects the company’s strong operational fundamentals, including its market position and product portfolio within the Plastic Products - Industrial sector. The company’s return on equity (ROE) stands at a respectable 14.8%, signalling efficient utilisation of shareholder capital. Despite this, the quality alone is insufficient to offset other concerns impacting the rating.

Valuation Considerations

The valuation grade for Supreme Industries Ltd is currently assessed as very expensive. The stock trades at a price-to-book (P/B) ratio of 7.9, which is significantly higher than the average valuations of its peers. This premium valuation suggests that the market has priced in strong growth expectations, which may be challenging to meet given recent financial trends. Investors should be wary that paying a high premium increases downside risk if the company’s performance falters.

Financial Trend Analysis

The financial trend for Supreme Industries Ltd is negative as of the latest data. The company has reported negative results for five consecutive quarters, with the latest quarterly profit after tax (PAT) at ₹164.74 crores, reflecting a decline of 20.3%. Additionally, the PBDIT (profit before depreciation, interest, and taxes) for the quarter is at a low ₹297.40 crores. The debtors turnover ratio for the half-year is also at a concerning low of 1.91 times, indicating potential issues with receivables management. Over the past year, the stock has delivered a return of -23.51%, while profits have fallen by 22.3%, underscoring the deteriorating financial health.

Technical Outlook

The technical grade is mildly bearish, reflecting recent price action and momentum indicators. The stock’s short-term performance shows mixed signals: a modest gain of 6.84% over the past month contrasts with a sharper decline of 14.90% over three months and 15.22% over six months. Year-to-date, the stock has gained 6.00%, but the one-year return remains negative at -23.51%. This pattern suggests that while there may be intermittent rallies, the overall trend remains weak, cautioning investors about potential volatility and downside risk.

Comparative Performance and Market Context

Supreme Industries Ltd’s underperformance is evident when compared to broader market indices such as the BSE500. The stock has lagged behind over one year, three years, and three months, indicating persistent challenges in regaining investor confidence. The combination of a high valuation and weakening financials contributes to the cautious 'Sell' rating, signalling that investors may want to consider alternative opportunities with stronger fundamentals and more attractive valuations.

Implications for Investors

For investors, the 'Sell' rating suggests prudence in holding or acquiring Supreme Industries Ltd shares at current levels. The excellent quality of the company is overshadowed by its expensive valuation and negative financial trends, which could limit upside potential and increase downside risk. The mildly bearish technical outlook further supports a cautious approach. Investors should closely monitor upcoming quarterly results and any strategic initiatives by the company that could improve profitability and operational efficiency before reconsidering their stance.

Summary of Key Metrics as of 09 January 2026

The latest data highlights several critical points for Supreme Industries Ltd:

• Market capitalisation categorises it as a midcap stock within the Plastic Products - Industrial sector.


• Mojo Score stands at 41.0, reflecting a 'Sell' grade, down from a previous 'Hold' rating with a score of 57 as of 23 October 2025.


• Stock returns over various periods show volatility and weakness: a 1-day gain of 0.02%, 1-week gain of 0.76%, but a 3-month loss of 14.90% and a 1-year loss of 23.51%.


• Financial indicators such as declining PAT and PBDIT, alongside a low debtors turnover ratio, point to operational challenges.

Outlook and Considerations

While Supreme Industries Ltd continues to demonstrate operational quality, the current valuation and financial trends warrant caution. Investors should weigh the risks of holding the stock against potential recovery catalysts. Monitoring quarterly earnings, management commentary, and sector developments will be essential to reassess the stock’s prospects. Until then, the 'Sell' rating serves as a prudent guide for portfolio positioning.

Conclusion

In conclusion, Supreme Industries Ltd’s 'Sell' rating by MarketsMOJO, last updated on 23 October 2025, reflects a comprehensive evaluation of its current fundamentals as of 09 January 2026. The company’s excellent quality is offset by very expensive valuation, negative financial trends, and a mildly bearish technical outlook. This combination suggests limited near-term upside and heightened risk, advising investors to approach the stock with caution and consider alternative investment opportunities with stronger financial health and more attractive valuations.

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