I have attended the AGM of Supreme Petrochem on 12-Jul-2017 at Mumbai.
The 52 week high as well as historical high, was attended by the stock on 27-Apr-2017 at ₹446.80. In my view, the softening of the rates of Supreme Petrochem at the stock exchanges, since 27-Apr-2017, are for the following two reasons:-
-
Because the price of raw material (Styrene Monomer), which is derivative of crude oil, has fallen, between 17-Feb-2017 till 15-May-2017, hence the inventory losses on account of raw materials, in Q1 FY 2018.
-
All the white goods industries stockiest & dealers were interested in off loading the old inventories of “Polystyrene” from 15-May-2017 till 30-Jun-2017, because implementation of GST. And demand is being affected & EPS came down from Rs.4.73 (Q1 FY 2016-17) to Rs.1.07 (Q1 FY 2017-18).
As per my point of view, both the things are in the past & already being discounted as well.
Because in Q2 FY 2017-18 the EPS is Rs.3.79 as against Rs.2.97 in Q2 FY 2016-17 (a growth of 27.61%).
Supreme Petrochem’s 2 new products are being included in CPWD’s - Daily Schedule Rates, since 2016 & they are:
Expandable Polystyrene (EPS)
Extruded Polystyrene Insulation Board (XPS).
Also EPS 3D panel is one of the technologies selected under the “Pradhan Mantri Awas Yojna”. Where in you do not need BRICKS, PILLARS & BEAMS, while constructing GROUND PLUS 3 houses. They have sold 42,000 MT “Expandable Polystyrene (EPS)” in 2016-17. It is a low cost construction, built in thermal insulation, faster construction & safety against termites & earthquake etc.
Regarding: Styrene Methyl Methacrylate (SMMA), they are the only player in India so far.
Please go through the, CHAIRMAN’s STATEMENT at AGM dated 12-Jul for detailed information.