Strong rural demand cushions volume weakness for Supreme Industries

Expanding distribution reach, value added products to help revenues, margins

The stock of India’s largest plastic pipes company, Supreme Industries, is up 18 per cent since its lows in August on hopes that demand from the rural segment, higher realisations, and market share gains will support its revenue growth. 

Weak volume growth because of falling demand from the construction and plumbing segments had dented the financial performance of pipe companies in the June quarter; Supreme Industries reported a 27 per cent dip in revenues on the back of a 19 per cent drop in volumes. 

While the company operates in four segments -- including packaging, consumer, and industrial -- plastic piping is