Supreme Petrochem Gains 4.84%: Valuation Concerns Temper Strong Weekly Rally

Monday, 9 February 2026: Strong Intraday Rally Signals Renewed Buying Interest

Supreme Petrochem Ltd began the week on a robust note, surging 7.34% to close at Rs.639.70, with an intraday high of Rs.645. This represented a significant outperformance against the Sensex’s 1.04% gain to 37,113.23. The stock’s 7.01% day gain was well above the Chemicals sector’s 2.52% advance, highlighting strong buying momentum. This rally reversed a short-term downtrend and positioned the stock above its 5-day, 20-day, and 50-day moving averages, signalling positive short- to medium-term momentum. However, it remained below its longer-term averages, indicating that the broader trend had yet to fully align with this strength.

Tuesday, 10 February 2026: Valuation Concerns Emerge Despite Price Gains

The stock continued to edge higher on 10 February, closing at Rs.647.15, up 1.16% on the day and reaching the week’s peak price. However, this price strength coincided with a notable shift in valuation metrics. Supreme Petrochem’s price-to-earnings ratio rose to 44.19, categorising the stock as expensive relative to its historical averages and peer group. The price-to-book value ratio also increased to 5.40, while enterprise value multiples (EV/EBIT at 35.67 and EV/EBITDA at 28.56) further underscored the stretched valuation. These elevated multiples suggest that the market is pricing in strong growth expectations that may be challenging to sustain.

Comparatively, while Supreme Petrochem’s valuation is high, it is not the most extreme in the petrochemicals sector, with peers like Navin Fluorine International trading at even higher multiples. The company’s solid operational metrics, including a return on capital employed of 20.05% and return on equity of 12.23%, support its premium, but the modest dividend yield of 1.57% offers limited income cushion. The Mojo Grade downgrade to ‘Sell’ with a score of 33.0 reflects increased caution amid these valuation concerns.

Wednesday and Thursday, 11-12 February 2026: Price Consolidation Amid Mixed Market Signals

Following the strong start, Supreme Petrochem’s price stabilised with minor fluctuations. On 11 February, the stock slipped slightly by 0.30% to Rs.645.20, while the Sensex inched up 0.13% to 37,256.72. The next day, 12 February, saw a marginal gain of 0.05% to Rs.645.55, despite the Sensex retreating 0.56% to 37,049.40. Trading volumes remained moderate, reflecting a period of consolidation as investors digested the prior days’ gains and valuation concerns.

Friday, 13 February 2026: Profit Taking and Broader Market Weakness Weigh on Price

The week concluded with a notable decline in Supreme Petrochem’s share price, which fell 3.21% to close at Rs.624.80. This retreat was sharper than the Sensex’s 1.40% drop to 36,532.48, indicating some profit-taking and risk aversion amid broader market weakness. The stock’s volume of 2,028 shares was moderate, suggesting measured selling pressure rather than a panicked exit. This pullback capped the week’s gains but left the stock with a solid 4.84% weekly advance, outperforming the Sensex’s 0.54% loss.

Daily Price Comparison: Supreme Petrochem Ltd vs Sensex

Key Takeaways from the Week

Positive Signals: Supreme Petrochem Ltd demonstrated strong intraday buying interest early in the week, with a 7.34% gain on Monday that significantly outpaced the Sensex and sector indices. The stock’s ability to trade above short- and medium-term moving averages suggests improving momentum. Its long-term returns remain impressive, with a five-year gain of 248.57% and a ten-year return exceeding 1,000%, underscoring the company’s historical growth trajectory.

Cautionary Signals: The shift in valuation metrics to an expensive rating, with a P/E of 44.19 and elevated EV multiples, raises concerns about price attractiveness. The downgrade in Mojo Grade to ‘Sell’ reflects increased risk perception. The modest dividend yield of 1.57% offers limited income support, and the stock’s retreat on Friday amid broader market weakness highlights vulnerability to profit-taking and market sentiment shifts.

Investors should weigh the stock’s recent price strength against the stretched valuation and monitor upcoming earnings and sector developments closely. The mixed signals suggest a need for measured positioning rather than aggressive accumulation at current levels.

Conclusion

Supreme Petrochem Ltd’s week was characterised by a strong start with a notable intraday rally, followed by a valuation reassessment that tempered enthusiasm. The stock outperformed the Sensex by nearly 5.4% over the week, closing at Rs.624.80, but faces challenges from elevated price multiples and a cautious market outlook. While operational metrics remain solid and long-term returns impressive, the premium valuation and recent Mojo Grade downgrade suggest investors should approach with prudence. The stock’s performance this week reflects a balance between renewed buying interest and emerging concerns about sustainability of gains amid sector and market headwinds.

Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →