Stock buzz: Supreme Industries not far away from 52-week high

ET Now’s Nikunj Dalmia shares his views on Supreme Industries. Excerpts:

Nikunj Dalmia: The market mood and market bias are clearly tilted towards quality midcap stocks and Supreme Industries is one stock where the recent accumulation from HNI investors, some marquee offshore funds and local mutual funds is quite impressive.

This is a good company in a bad sector. The market buzz is that for this year and for this current quarter, they are likely to report a strong expansion in their operating profit margins because of a better product mix.

They are sitting on large real estate land which the management has indicated that they are planning to monetise the value of that land, which is estimated at about Rs 200 crore plus. In the next 12 to 18 months, either they will sell out or they would capitalise it via the rental model. That is something which could be a medium-term trigger. Experts feel that Supreme Industries could easily go to Rs 415, even Rs 420, as HNI accumulation is strong. When the bias is towards buying quality midcap stocks, Supreme Industries is on the top of the radar.

If you look at the delivery-based patterns for Supreme Industries, they are indicating that in the short term, the stock is poised to go higher. It is not very far from its 52-week high and fundamentally too, it is trading at something like 14-15 times, which is not very expensive for a quality franchise like Supreme Industries.