Valuation Metrics Signal Improved Price Attractiveness
As of 19 Aug 2026, Supreme Petrochem’s price-to-earnings (P/E) ratio stands at 26.94, a level that has contributed to its upgraded valuation grade from fair to attractive. This P/E is significantly lower than many of its industry peers, several of whom trade at P/E multiples exceeding 30, with some even surpassing 70. For instance, Acutaas Chemicals commands a P/E of 71.85, while Aether Industries trades at an eye-watering 90.45. This disparity highlights Supreme Petrochem’s relative undervaluation within the petrochemicals sector.
Similarly, the price-to-book value (P/BV) ratio of 5.59, while elevated compared to traditional benchmarks, remains modest against the sector’s more expensive players. The company’s enterprise value to EBITDA (EV/EBITDA) multiple of 17.16 also underscores a more reasonable valuation stance, especially when contrasted with peers like Himadri Speciality Chemical and Sumitomo Chemical, which trade at EV/EBITDA multiples near or above 39.
These valuation improvements come alongside a PEG ratio of 0.67, indicating that the stock’s price growth is not outpacing its earnings growth potential. This metric is particularly compelling when compared to the sector’s average PEG ratios, which often exceed 1.0, signalling that Supreme Petrochem offers better value for growth.
Only 1% make it here. This Large Cap from the Gems, Jewellery And Watches sector passed our rigorous filters with flying colors. Be among the first few to spot this gem!
- - Highest rated stock selection
- - Multi-parameter screening cleared
- - Large Cap quality pick
Financial Performance Supports Valuation Upgrade
Supreme Petrochem’s return on capital employed (ROCE) and return on equity (ROE) stand at robust levels of 25.67% and 20.68% respectively, underscoring efficient capital utilisation and strong profitability. These figures are critical in justifying the company’s valuation, especially in a sector where capital intensity and cyclical demand can weigh heavily on returns.
The company’s dividend yield of 1.49% adds an income component to the investment case, albeit modest, but consistent with its growth-oriented profile. The enterprise value to capital employed ratio of 7.60 further indicates a balanced valuation relative to the company’s asset base.
Stock Price and Market Capitalisation Context
Trading at ₹705.00 per share, down from a previous close of ₹724.10, Supreme Petrochem’s stock price has retraced from its 52-week high of ₹981.65 but remains well above its 52-week low of ₹460.95. This price movement reflects both market volatility and sector-specific headwinds, yet the valuation upgrade suggests that the current price offers a more compelling entry point for investors.
As a small-cap entity, Supreme Petrochem’s market capitalisation grade aligns with its size, but its mojo score of 77.0 and upgraded mojo grade to Buy from Hold on 12 Aug 2026 signal growing investor confidence and improved fundamentals.
Comparative Returns Highlight Long-Term Outperformance
Examining returns relative to the Sensex reveals Supreme Petrochem’s strong long-term performance. Over a 10-year horizon, the stock has delivered a staggering 679.18% return compared to the Sensex’s 174.63%. Even over three and five years, the company has outpaced the benchmark by wide margins, with returns of 62.50% and 110.74% respectively, versus Sensex returns of 18.92% and 38.84%.
Shorter-term returns also show resilience, with a 1-week gain of 2.81% and a year-to-date return of 9.39%, both outperforming the Sensex’s negative returns in these periods. However, the stock has experienced a 12.22% decline over the past year, underperforming the Sensex’s 4.97% loss, reflecting some recent volatility and sector pressures.
Peer Comparison Reinforces Relative Value
Within the petrochemicals sector, Supreme Petrochem’s valuation stands out as attractive when compared to a peer group dominated by very expensive stocks. Navin Fluorine International, Himadri Speciality Chemical, Sumitomo Chemical, and Deepak Nitrite all trade at significantly higher P/E and EV/EBITDA multiples, indicating that Supreme Petrochem offers a more reasonable price point for investors seeking exposure to the sector.
Atul and Aarti Industries, trading at fair and expensive valuations respectively, also highlight the spectrum of pricing within the sector. Supreme Petrochem’s position closer to the attractive end of this spectrum suggests potential upside as market sentiment improves or earnings growth accelerates.
Thinking about Supreme Petrochem Ltd? Our real-time Verdict report breaks down everything – from financial health and peer comparison to technical signals and fair valuation for this small-cap stock!
- - Real-time Verdict available
- - Financial health breakdown
- - Fair valuation calculated
Outlook and Investment Considerations
Supreme Petrochem’s upgraded valuation grade to attractive, combined with its solid financial metrics and long-term outperformance, makes it a compelling candidate for investors seeking exposure to the petrochemicals sector at a reasonable price. The company’s efficient capital deployment, as evidenced by its ROCE and ROE, supports sustainable earnings growth potential.
However, investors should remain mindful of the sector’s cyclical nature and recent price volatility, as reflected in the stock’s 12.22% decline over the past year. The current P/E of 26.94, while attractive relative to peers, still demands continued earnings momentum to justify further multiple expansion.
In summary, Supreme Petrochem Ltd offers a balanced risk-reward profile with valuation metrics signalling improved price attractiveness. Its small-cap status and mojo grade upgrade to Buy reinforce the stock’s potential as a growth-oriented investment within the petrochemicals industry.
Get 33% Off on our 1 Year Plan - Limited Period Only! Start Today
