Valuation Metrics and Market Context
As of 13 Aug 2026, Supreme Petrochem’s P/E ratio stands at 27.78, a figure that has contributed to the company’s valuation grade being downgraded from attractive to fair. This P/E multiple, while moderate, is significantly lower than many of its sector peers, several of whom are classified as very expensive. For instance, Navin Fluorine International trades at a P/E of 53.86, Himadri Speciality Chemical at 48.13, and Acutaas Chemicals at 66.71, underscoring Supreme Petrochem’s relatively more reasonable earnings multiple.
The company’s price-to-book value ratio is currently 5.77, which, while elevated, remains below the levels seen in some competitors. This metric suggests that the market is pricing Supreme Petrochem’s net assets at a premium, but not excessively so compared to the broader petrochemical industry.
Other valuation indicators such as the enterprise value to EBITDA (EV/EBITDA) ratio at 17.73 and enterprise value to EBIT at 20.56 further reinforce the fair valuation stance. These multiples are considerably lower than those of peers like Aether Industries, which trades at an EV/EBITDA of 56.40, indicating that Supreme Petrochem remains more accessible on an operational earnings basis.
Comparative Peer Analysis
When benchmarked against its peer group, Supreme Petrochem’s valuation metrics reveal a more balanced risk-reward profile. The company’s PEG ratio of 0.69 is particularly noteworthy, suggesting that its price is reasonably aligned with earnings growth expectations. This contrasts with some peers such as Sumitomo Chemical, which exhibits an outsized PEG ratio of 18.7, signalling potentially stretched valuations relative to growth.
Return on capital employed (ROCE) and return on equity (ROE) also provide insight into the company’s operational efficiency and profitability. Supreme Petrochem’s ROCE of 25.67% and ROE of 20.68% are robust, indicating strong capital utilisation and shareholder returns. These figures support the company’s Buy rating and Mojo Score of 74.0, which was upgraded from Hold on 12 Aug 2026, reflecting improved confidence in its fundamentals.
Stock Performance and Market Capitalisation
Supreme Petrochem is classified as a small-cap stock, with its current market price at ₹726.05, up 5.88% on the day from a previous close of ₹685.70. The stock has traded within a 52-week range of ₹460.95 to ₹981.65, demonstrating considerable volatility but also significant upside potential over the medium term.
Performance comparisons with the Sensex index reveal that Supreme Petrochem has outperformed the benchmark over multiple time horizons. Year-to-date, the stock has delivered a 12.65% return, while the Sensex has declined by 8.51%. Over five years, the stock’s return of 111.46% far exceeds the Sensex’s 42.16%, and over a decade, the company has delivered an extraordinary 711.41% gain compared to the Sensex’s 176.94%. This outperformance underscores the company’s strong growth trajectory and resilience in a cyclical sector.
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Implications of Valuation Grade Change
The shift from an attractive to a fair valuation grade signals a recalibration in how investors perceive Supreme Petrochem’s growth prospects and risk profile. While the company’s fundamentals remain strong, the market appears to be pricing in a more cautious outlook, possibly reflecting broader sector headwinds or valuation realignments following recent price appreciation.
Despite this, the company’s valuation remains compelling relative to many of its peers, which continue to trade at very expensive multiples. This relative affordability, combined with solid returns on capital and consistent earnings growth, supports the current Buy rating and suggests that Supreme Petrochem could offer value for investors seeking exposure to the petrochemicals sector without the premium valuations of larger competitors.
Dividend Yield and Capital Efficiency
Supreme Petrochem’s dividend yield of 1.44% adds an income component to its investment appeal, albeit modest in comparison to some dividend-focused stocks. The company’s efficient use of capital, as evidenced by its ROCE and ROE metrics, indicates that it is well-positioned to sustain profitability and potentially increase shareholder returns over time.
Enterprise value to capital employed (EV/CE) at 7.85 and EV to sales at 2.29 further highlight the company’s operational efficiency and reasonable valuation on a sales basis, reinforcing the notion that Supreme Petrochem is fairly valued in the current market environment.
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Outlook and Investor Considerations
Looking ahead, Supreme Petrochem’s valuation metrics suggest a stock that has matured beyond its earlier discount but still offers a reasonable entry point relative to sector peers. Investors should weigh the company’s strong historical returns and operational metrics against the broader petrochemical industry’s cyclical nature and potential macroeconomic risks.
Given the company’s upgraded Mojo Grade to Buy and a solid Mojo Score of 74.0, it remains a compelling candidate for investors seeking growth within the small-cap petrochemicals space. However, the recent valuation grade change advises caution and encourages a thorough analysis of market conditions and company fundamentals before committing capital.
In summary, Supreme Petrochem Ltd’s valuation shift from attractive to fair reflects a nuanced market reassessment. While the stock’s multiples have expanded, they remain reasonable compared to many peers, supported by strong profitability and consistent returns. This balance of factors underpins the current positive rating and suggests that the company remains well-positioned for investors with a medium to long-term horizon.
Summary of Key Financial Metrics
Supreme Petrochem’s key valuation and performance indicators as of August 2026 include:
- P/E Ratio: 27.78
- Price to Book Value: 5.77
- EV to EBIT: 20.56
- EV to EBITDA: 17.73
- PEG Ratio: 0.69
- Dividend Yield: 1.44%
- ROCE: 25.67%
- ROE: 20.68%
- Market Cap Grade: Small-cap
- Mojo Score: 74.0 (Buy, upgraded from Hold on 12 Aug 2026)
These figures collectively illustrate a company that balances growth potential with reasonable valuation, making it a noteworthy contender in the petrochemicals sector.
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