Current Rating and Its Significance
MarketsMOJO’s 'Sell' rating for Supreme Industries Ltd indicates a cautious stance for investors considering this stock at present. This rating suggests that the stock is expected to underperform relative to the broader market or its sector peers in the near to medium term. Investors should carefully evaluate the company’s financial health, valuation, and market trends before making investment decisions. The rating was revised on 23 October 2025, reflecting a reassessment of the company’s prospects, but the data presented here is based on the latest available information as of 31 January 2026.
Quality Assessment
As of 31 January 2026, Supreme Industries Ltd holds a 'good' quality grade. This indicates that the company maintains a reasonable standard in operational efficiency and business fundamentals. However, the quality grade alone does not offset other concerns. The company’s operating profit growth has been modest, with a compound annual growth rate of just 2.52% over the past five years, signalling limited expansion in core profitability. Additionally, the firm has reported negative results for six consecutive quarters, highlighting ongoing challenges in sustaining earnings momentum.
Valuation Considerations
The valuation grade for Supreme Industries Ltd is classified as 'very expensive'. Currently, the stock trades at a price-to-book value of 7.8, which is significantly higher than the average valuations of its peers in the plastic products industrial sector. This premium valuation is not supported by commensurate earnings growth or returns, as the company’s return on equity (ROE) stands at 14.8%, which, while respectable, does not justify the elevated price multiples. Investors should be wary of paying a premium for a stock with subdued growth prospects and deteriorating profitability.
Financial Trend Analysis
The financial trend for Supreme Industries Ltd is negative as of the current date. Key financial indicators reveal a decline in profitability and operational efficiency. The company’s profit before tax excluding other income (PBT less OI) for the latest quarter is ₹202.30 crores, reflecting a fall of 14.46%. Similarly, the profit after tax (PAT) for the quarter has decreased by 18.0%, standing at ₹153.37 crores. The return on capital employed (ROCE) for the half-year is at a low 18.37%, underscoring weakening capital efficiency. These trends suggest that the company is facing headwinds that are impacting its bottom line and overall financial health.
Technical Outlook
The technical grade assigned to Supreme Industries Ltd is 'mildly bearish'. This assessment is consistent with the stock’s recent price performance, which has been mixed but generally weak over the medium term. As of 31 January 2026, the stock has delivered a one-year return of -8.30%, underperforming the broader BSE500 index over the last one year, three years, and three months. Shorter-term price movements show some volatility, with a 1-month gain of 6.67% but a 6-month decline of 16.35%. The mild bearish technical outlook suggests that the stock may continue to face downward pressure unless there is a significant improvement in fundamentals or market sentiment.
Stock Returns and Market Performance
Currently, Supreme Industries Ltd’s stock price reflects a challenging environment. The year-to-date return is +4.15%, but this masks longer-term weakness. Over the past six months, the stock has declined by 16.35%, and over the past year, it has fallen by 8.30%. These returns are below the performance of the BSE500 index, indicating relative underperformance. The stock’s day change on 31 January 2026 was a slight decline of 0.38%, reflecting ongoing investor caution.
Investment Implications
For investors, the 'Sell' rating on Supreme Industries Ltd suggests prudence. The combination of a very expensive valuation, negative financial trends, and a mildly bearish technical outlook indicates that the stock may not offer attractive returns in the near term. While the company maintains good quality fundamentals, these are currently overshadowed by deteriorating profitability and stretched price multiples. Investors should consider these factors carefully and may wish to explore alternative opportunities with stronger financial momentum and more reasonable valuations.
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Sector and Market Context
Supreme Industries Ltd operates in the plastic products industrial sector, a segment that has faced various challenges including raw material price volatility and fluctuating demand. The company’s midcap market capitalisation places it in a competitive bracket where growth and profitability are critical for investor confidence. The current market environment demands robust financial performance and attractive valuations, both of which are areas where Supreme Industries Ltd is currently under pressure. Investors should monitor sector trends and peer performance closely when considering this stock.
Summary of Key Metrics as of 31 January 2026
The latest data shows the following key metrics for Supreme Industries Ltd:
- Mojo Score: 34.0 (Sell Grade)
- Operating profit growth (5-year CAGR): 2.52%
- ROCE (Half Year): 18.37%
- PBT less Other Income (Quarterly): ₹202.30 crores, down 14.46%
- PAT (Quarterly): ₹153.37 crores, down 18.0%
- ROE: 14.8%
- Price to Book Value: 7.8 (Very Expensive)
- Stock Returns: 1Y -8.30%, 6M -16.35%, 1M +6.67%
These figures collectively underpin the current 'Sell' rating and highlight the need for investors to exercise caution.
Conclusion
Supreme Industries Ltd’s current 'Sell' rating by MarketsMOJO reflects a comprehensive evaluation of its quality, valuation, financial trends, and technical outlook as of 31 January 2026. While the company retains some positive attributes in quality, the very expensive valuation and negative financial trajectory weigh heavily against it. The mildly bearish technical signals and underwhelming stock returns further reinforce the cautious stance. Investors should consider these factors carefully and remain vigilant about the company’s future performance before committing capital.
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