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Supreme Petrochem Ltd. Call Transcript 2026
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SPL
SUPREME PETROCHEM LTD
Regd. Office :
Solitaire Corporate Park, Building No. 11, 5th Floor, 167, Guru Hargovindji Marg, Andheri-Ghatkopar Link Road, Chakala, Andheri (East), Mumbai-400 093. INDIA
☎ : 91-22-6709 1900 Fax - 022 - 4005 5681 • CIN : L23200MH1989PLC054633
Website: www.supremepetrochem.com • Email: [email protected]
Ref: CFA/CS/86/AGM_37/2026-2027
Date: April 30, 2026
BSE Limited
Phiroze Jeejeebhoy Towers,
1st Floor, Dalal Street,
Mumbai - 400 001
Scrip Code - 500405
National Stock Exchange of India Ltd
Exchange Plaza, Bandra Kurla Complex
Bandra East,
Mumbai – 400 051
Symbol – SPLPETRO
Dear Sir/Madam,
Sub: Transcript of Earnings Conference Call of Supreme Petrochem Ltd ('The Company')
Ref: Regulation 30 of Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015 ('Listing Regulations')
Please refer our letter dated April 22, 2026, wherein we had informed that Earnings Conference Call of the Company will be held on April 28, 2026 to discuss Q4/FY25-26 earnings.
In this regard, pursuant to Regulation 30 of Listing Regulations, Transcript of the Conference Call is enclosed herewith.
This intimation along with the transcript will also be uploaded on the website of the Company at www.supremepetrochem.com.
This is for your information and record.
Thanking you.
Yours faithfully,
For Supreme Petrochem Ltd
D. N. Mishra
A.V.P (Legal) & Company Secretary
Encl: a/a
DEOKI
NANDAN
MISHRA
Digitally signed by DEOKI NANDAN MISHRA
DN: c=RI, o=Personal,
pseudonym=Ipehx1780jc2gmedabmujbvyo
DRLMS
J.S.K.00=04F8c098a3d68aC5a6fcx5a8da5164
epdll:24ad14d27000750bbb04147fa,
pibzjaCode=400065, dr=Mahanathha,
oenaRkpzjlpii=74061a4d1274034a2235aa1e
69869a364dc54d83cbd88c765a5cd337858d
2N1, cn=DEOKI NANDAN MISHRA
Date: 2026.04.30 18:49:35 +05'30'
ISO 9001:2015
ISO 14001:2015
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Certification
BUREAU VERITAS 1828
U.S.A.
(C)
668
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INDIAN CUSTOMS
Certificate No. INAAACS7249C3F258
SPL
Supreme Petrochem Limited
Q4 & Financial Year 2026 Earnings Conference Call
April 28, 2026
Moderator:
Ladies and gentlemen, good day and welcome to the Q4 FY'26 Earnings Conference Call of Supreme Petrochem Limited.
As a reminder, all participant lines will be in a listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing “*” then “0” on your touchtone phone.
I now hand the conference over to Ms. Purvangi Jain from Valorem Advisors. Thank you and over to you, ma'am.
Purvangi Jain:
Thank you. Good evening, everyone, and a very warm welcome to you all. My name is Purvangi Jain from Valorem Advisors. We represent the Investor Relations of Supreme Petrochem Limited.
On behalf of the Company, I would like to thank you all for participating in the Company's Earnings Call for the 4th Quarter & Financial Year ended 2026.
Before we begin, let me mention a quick cautionary statement:
Some of the statements made in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject to risk and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management belief as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of today's Earnings Conference Call is purely to educate and bring awareness about the Company's fundamental business and financial performance for the quarter under review.
Now, let me introduce you to the Management participating with us in today's Earnings Call. We have with us Mr. Rakesh Nayyar – Executive Director and CFO, Mr. Dilip Deole – Chief Executive Officer of Finance and Accounts, and Mr. D. N. Mishra – Company Secretary.
Without any delay, I request Mr. Rakesh Nayyar to start with his opening remarks. Thank you and over to you, sir.
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Rakesh Nayyar:
Thank you, Purvangi. Good evening, everyone. It's a pleasure to welcome you to the Earnings Conference Call for the 4th Quarter and the Financial Year 2026.
We will give you a brief overview of the performance for the quarter ended 31st March:
On a standalone basis, the revenue from the operations for the 4th Quarter stood at INR 1,587 crores, reflecting a growth of 3% year-on-year. The 4th Quarter is typically a strong quarter for the Company, supported by seasonally higher demand generally.
The performance during the quarter was driven by higher volumes and better spreads. Styrene monomer prices remained stable during the quarter, except when it witnessed sharp jump in the month of March. The operating EBITDA stood at INR 253 crores, reflecting a growth of 75% year-on-year, with operating EBITDA margins improving to 15.9%.
The total EBITDA was at INR 264 crores, including the other income. The net profit after tax stood at INR 168 crores, with a PAT margin of 10.59% for the quarter.
For the Financial Year 2026, the revenue from operations stood at INR 5338 crores. This is reflecting a decline of 11% year-on-year, primarily on account of lower average styrene monomer price during the year. Average styrene monomer prices were lower by around 17% compared to the previous year, which resulted in lower realizations despite nominal volume growth. The operating EBITDA stood at INR 515 crores, with the total EBITDA being at INR 558 crores, with a margin of 10.37%, and a net profit margin at INR 327 crores, with a margin of 6.13%.
On the operational front, the sales volume of manufactured products increased to 100,664 tons in Quarter 4, 2026, as against 95,556 tons in Quarter 4, 2025, reflecting a growth of about 5.4%. For the full year, volumes stood at 363,203 metric tons, as compared to 355,967 metric tons in last year, reflecting a growth of about 2%.
Demand from OEM segments remained healthy during the quarter, while non-OEM segments witnessed some softness, and capacity utilization for the year remained healthy at over 80%. The volumes reported are a net of approximately 14,000 tons of the products being transferred and consumed internally for compounding and in the use for XPS installation board and hence are not included in the external sales volumes.
On the raw material front, styrene monomer prices remained largely stable until February 2026, within a range of (+/-10%). However, prices increased sharply in March 2026, following the West Asia conflict and disruption in supply through the Strait of Hormuz. Styrene monomer prices rose from around $1,000 per ton prior to the conflict to a peak of approximately $1,650 per ton and have since moderated to around $1,500 per ton.
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While the shipments from the Middle East were impacted during the month, Company was able to meet domestic demand through sufficient inventory material in transit and sourcing from alternate geographies. Adequate arrangements have been made to ensure raw material availability going forward in the coming months, and the situation will ease only once the normal shipping through the Strait of Hormuz resumes.
With regard to our CAPEX projects, manufacturing operations of the maas ABS plant have restarted with modified arrangements and are currently operating at around 65% of the design capacity, pending restoration of the impacted equipment. The product has been well accepted in the market, and we are pleased to inform that the EPS Phase-II expansion project at our Nagothane complex was successfully commissioned on April 14, 2026, enhancing the EPS capacity from 85,000 tons per annum to 115,000 tons per annum at Amdoshi complex.
On the balance sheet side, the Company continues to remain debt-free with an investable surplus of INR 700 crores as at the end of March 2026. All capital expenditure continues to be funded through internal accruals.
The Board of Directors has recommended a final dividend of INR 8 per equity share along with the interim dividend of INR 2.5 per share declared earlier. The total dividend for the year stands at INR 10.5 per equity share of face value of INR 2 each.
With this, I conclude my opening remarks. We are now open to the floor for question-and-answer session. Thank you.
Moderator:
Thank you very much. We will now begin with the question-and-answer session. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We will take the first question from the line of Aditya Khetan from Smifs Institutional Equities. Please go ahead.
Aditya Khetan:
Yes, thank you, sir, for the opportunity. So, just a couple of questions and congrats on a good set of numbers also. So, my first question is, is it possible to quantify the inventory gains in this quarter or a ballpark figure, if you can give? And consequent to this, suppose if the situation into the West Asia stabilizes, when are we expecting that to come to an end and subsequently in inventory losses, if you would take, so that would be booked in Q1 or Q2, any sense on that, sir?
Rakesh Nayyar:
Aditya, it's very difficult, very, very difficult to estimate the gains or the inventory gain or loss at the moment. Because even in the month of March when the prices of the raw material increased and the shipments which were to be loaded, they were stopped. So, some consignments had to be arranged at very high prices. So, it's very difficult to estimate that. And going forward also, similarly, when the situation normalizes and our inventories on the high seas or inventories in stock here, what losses will happen, nobody knows. It's very
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difficult to assume. Because the last month the prices were at $1,650 a ton, and today they are ruling around $1,500 a ton. So, this is something which is very dynamic, and estimating this is very, very difficult, rather next to impossible at the moment.
Aditya Khetan:
Okay, got it, sir. Sir, follow on to this question. Suppose if the prices stabilize at these levels, how do you see the demand from the end-user industries? Are OEMs still on their way to make contracts at these higher prices or they are waiting so that prices come down and then they start buying off the finished products? Any idea on that, sir?
Rakesh Nayyar:
OEMs are buying, but then we are not entering into contracts at the moment because the situation is so fluid that what assumptions to be made now in the current scenario for the raw material pricing and the other expenses to procure the raw material, the shipping costs have gone up, the freight costs are up, so it's very difficult to assume. And with OEMs, we have agreed that we will be doing contracts once the situation normalizes. Secondly, as far as the demand is concerned, the demand from the OEM sectors is good, but in the non-OEM sector, the demand has taken a big beating at the moment, particularly because 1) The prices are high, 2) The labor is also not available, the contract laborers has gone back to their villages and 3) For some processing, one needs gas and gas is not available to industry or in short supply.
Aditya Khetan:
Sir, what would be our raw material cycle or how much inventory we keep in the pipeline? And secondly, sir, if you can quantify also how much are we procuring styrene monomers from Gulf countries versus China versus US?
Rakesh Nayyar:
It is suffice to say that as far as domestic market is concerned, we will continue to meet the demand, and we are meeting the demand. We will source the material, and we will meet the domestic demand. That is our focus right now. And all our customers are being supplied material as and when they require it.
Aditya Khetan:
Got it. Sir, coming to ABS, as per our latest filing that the capacity design has been modified to make at 65% of the rated capacity earlier. So, is this the new normal or like, so this 65% can go to 100% as and when, so that technical failure will be resolved?
Rakesh Nayyar:
Once the failure gets resolved we will go to 100%. Equipment which failed has been isolated and the collaborators have provided us some alternate arrangements by which we can operate original capacity at 65%. Our capacity which was 70,000, for the time being, it is now reduced to say 45,000 tons.
Aditya Khetan:
Got it. Sir, in the presentation we have stated some, so 14,000 tons of mass ABS we have produced, and we have used it for the compounding. So, this 14,000 tons of ABS has been manufactured in the month of March only, right? So, 14,000 seems a good figure, some 20% odd utilization.
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Rakesh Nayyar:
We have not said 14,000 tons of ABS. What we have said is polystyrene and ABS of 14,000 tons produced and transferred for processing and compounding purposes. So, in the sales, this number does not come because these are an inter-divisional transfer. When you look at our sales volumes, that is net of these transfers. So, they have been produced in our other verticals and consumed in our compounding divisions.
Aditya Khetan:
Got it, sir. Sir, just one last question. Sir, any target volume guidance for FY27 for base volumes as well as for ABS, separate, sir, if you can give it.
Rakesh Nayyar:
No, I have only one volume number to give, If normalcy returns by June end, 2nd Quarter onwards things are normal, then we expect that with ABS operational, we should be able to do 8% to 10% volume growth this year.
Aditya Khetan:
But that seems low, sir, like considering ABS also is now started at 65% plus base business volume of EPS 15.23. That number looks slightly lower, sir.
Rakesh Nayyar:
Because the 1st Quarter, we don't know where we are at the moment.
Aditya Khetan:
Okay.
Rakesh Nayyar:
That too is what I am saying is subject to the complete normal situation being there from the 2nd Quarter onwards. Exports one can export to Europe today only thru Cape of Good Hope. The shipping time has increased, the freight rates have gone up. So, it is not the normal business conditions for exports.
Moderator:
Sorry to interrupt in between, Aditya. I have a kindly request you to rejoin the queue again for more questions. Thank you. We will take the next question from the line of Rahul Agarwal from Ikigai Asset Managers. Please go ahead.
Rahul Agarwal:
Hi, sir. Very good evening. Thank you for the opportunity and good sets of challenging environment, good numbers. Just starting with a couple of questions, mostly on pricing and then on sourcing of raw materials. So, on pricing, sir, for ABS and polystyrene both, what is the import price right now we are getting quotes for, like typical from an Indian industry perspective? And when we compare that to what are supreme sales on mass ABS or polystyrene, is that import parity pricing or does the rupee depreciate? So, is it similar? Is there a large difference there?
Rakesh Nayyar:
For the commodity grades, the base price is linked to landed price of imported material. Then one adds some premium here for the cost involved. So, for the commodity grade the base for the price decision is the landed price. But for the value added grades, price differential is entirely different. There are different calculations for that. And as far as the price of the imported material coming in, we have not heard of any PS imports coming in or booked.
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recently. So, I can't comment what prices the PS now will come. ABS, we heard that some imports have been booked at $2,300 and $2,400. And they may arrive now or in May or sometime later. So, early March, we had heard when the West Asia war started that the polystyrene at $1,650 or $1,700 was booked. This may arrive sometimes in May. Indian prices, as far as the commodity grades are concerned, they're generally in line with the landed prices plus the costs involved.
Rahul Agarwal:
But I should assume that polystyrene, whatever the Indian pricing is, is in line with what imported materials are there.
Rakesh Nayyar:
Yes, commodity grades, of the general grades, yes.
Rahul Agarwal:
Which basically means that on a quarter-on-quarter basis, we want to see polystyrene right now selling at what price, sir? Almost like INR 170-180 a kg?
Rakesh Nayyar:
They're all different, depending upon grade-to-grade.
Rahul Agarwal:
Got it? Sir, moving ahead on the raw material side, similar question. You mentioned styrene pricing right now spot at $1,500. Is it like whatever inflation we have seen on raw material, and you also mentioned you're not booking new contracts with OEMs, there's going to be more spot sales, I think. Should I assume it's 100% pass-through and customers are okay buying at that higher price and there's no hit on margin?
Rakesh Nayyar:
I said to the gentleman Aditya that the non-OEM market demand is dented at the moment. It's subdued also because of the high prices. As far as OEMs are concerned, it's the season for them, so they are buying, at the increased prices only. It's not that we don't want to enter into a contract with the OEMs. The OEMs have been our old partners, and we have been engaging with the OEMs from the beginning and we supply to practically all the OEMs in the country. It's only that the situation is so fluid in terms of the raw material prices, the freight costs, and other attributes which we consider that it is not fair to do a contract at this moment. Once the situation normalizes, then we will enter into our regular contracts with them.
Rahul Agarwal:
And last question, then I will get back in the queue. On the raw material sourcing side, when I look at the balance sheet, at 600 crores of inventory, it looks pretty stable on a y-o-y basis in terms of days of sales. Don't you think that companies actually stock more material? Anyway, the supplies were impacted in the 4th Quarter. Going forward, you mentioned you will ensure that domestic demand is completely met, 100%. Could you just elaborate on this sourcing part? Where are you getting styrene from? Incremental pricing, how should we look at it?
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Rakesh Nayyar:
The incremental pricing will get passed on to the consumers here. Only except when the prices really start dropping, then we may have an inventory loss. It's all a play of market supply and demand today. And as far as the sourcing of material is concerned, we source some from Asia and from China at the moment.
Rahul Agarwal:
Got it. Very clear, Rakeshji. I will get back in the queue. Thank you.
Moderator:
The next question is from the line of Manish Ostwal from Nirmal Bang Securities. Please go ahead.
Manish Ostwal:
Yes, sir. Thank you for the opportunity and good set of numbers. Sir, I have only one question about the Haryana CAPEX thing. Can you update what is the status and what is the CAPEX plan for the FY'27?
Rakesh Nayyar:
As far as Haryana is concerned, because the IOC's styrene monomer plant is delayed, as far as our polystyrene or EPS projects are concerned, we are not committing any expense for that at the moment. We are going to spend some money, but that will be more on the infrastructure and on the other related activities. Because once we have more clarity on the IOC's SM plant commissioning date, then only we will put in the big monies for the PS and EPS. Otherwise, we are planning to do some work in regard to the other units there this year.
Manish Ostwal:
And the CAPEX for the Fy-27, sir?
Rakesh Nayyar:
For the year, I don't have the separate numbers for Panipat, but for the year, for the Company as a whole, we will be doing around Rs.250 crores.
Manish Ostwal:
All right, sir. Thank you very much.
Moderator:
Thank you. The next question is from the line of Nirav Jimodia from Anvil Wealth. Please go ahead.
Nirav Jimodia:
Yes, sir. Good afternoon and thanks for the opportunity. Sir, a few questions. So, first is on the consumption of ABS and PS. So, like ABS on a monthly basis, we are close to around 25,000, 26,000 tons some months, maybe higher also. And for PS, we are currently close to around 30,000 tons a month. So, you mentioned that the OE demand were impacted during the quarter because of the reasons you mentioned on. If you can just help us understand what could be the demand coming from the non-OEM sector out of this total consumption of PS and EPS on a monthly basis, some understanding, sir.
Rakesh Nayyar:
I said the non-OEM market was impacted. Particularly in the month of April, not till March. In the month of April, the non-OEM demand is impacted. And as far as the division between the OEM and non-OEM is concerned, I would say for both categories, you can take roughly around 50-50 or 45% for OEM and 55% for non-OEM.
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Nirav Jimodia:
Correct. So, this is 55% of the demand which was impacted. Is it possible to use some quantum in terms of how much it would have reduced? So, let's say on a base of 100, which it was pre-war, how much it would have fallen in the month of April and May?
Rakesh Nayyar:
Too early to estimate that because in April only it started. So, once the quarter closes, will we have better numbers then.
Nirav Jimodia:
Correct. Sir, you mentioned about the styrene sourcing, like when we see the global map, let's say consumption of around 30-33 million tons of global consumption, where China is close to around 18 and we are at around 1.5 in terms of the global consumption. So, when we see the upstream of styrene, let's say benzene and ethylene or let's say slightly above that to Naptha, even China is importing everything. So, how they have been able to manage in terms of their captive consumption of styrene and also have some exportable surplus which could come to us, A, and B, if you can share your similar thoughts on acrylonitrile because then for ABS, this becomes a very critical raw material. So, from where the ACN part is currently coming from?
Rakesh Nayyar:
As far as ethylene and benzene is concerned, China is not fully dependent for this. They have their own internal production but for some part of it they are dependent. They were till now buying the crude from Russia as well as from Iran. They have some difficulties there, but then to that extent, their installed capacity was 18 million tons, but their own consumption was not 18 million tons of styrene monomer, it was less. And they are using surplus capacity now and they are able to export.
Nirav Jimodia:
And sir, for the ACN, if you can share your thoughts. Sorry?
Rakesh Nayyar:
ACN, we have not faced any difficulty till now. One, we have our own sufficient stock with us and some supplies were in the pipeline, they have come for us. And going forward also, we are getting it right now. We are getting it from the other geographies.
Nirav Jimodia:
Correct. So, last time in our conference call, you updated about onboarding some larger customers for Xmold. And you also mentioned that one of the bigger OEM, which was like a third OEM, we had a good discussion, which probably could come on board with us. So, if you can help us understand like, has that customer been onboarded A and B how do we see the Xmold volumes picking up in FY27? So, first, if you can share your thoughts on the utilization part in FY26. And how are we seeing FY27 for Xmold?
Rakesh Nayyar:
The OEM customers, which we said in the last concall, are on board, we are getting some orders from them. And the third one was an automobile one where our material is going to their tier one supplier for the automobile Company. As far new customer induction is concerned, that is going on there. As far volumes are concerned after the all streamlining and cleaning up there, we expect that this year, we should be doing 50 to 60% more. Like last
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year, we did utilization of close to only around 50% or rather 40-45% of their overall installed capacity. And this year, we should be doing close to say 70% of that capacity or 65 to 70% of that capacity.
Nirav Jimodia:
Perfect, sir. Sir, last question from my side, what was the trading sales in quarter four of FY26? Yeah, sir, like we reported close to around 1587 crores of turnover this quarter. How much of it was trading, out of trading of this year?
Rakesh Nayyar:
Generally, roughly, it will be around 18% or so in this quarter.
Nirav Jimodia:
Sorry, sir, I missed your point.
Rakesh Nayyar:
Around 18%.
Nirav Jimodia:
Okay, so 18% was the trading sales.
Rakesh Nayyar:
18% for this quarter. Even for the full year, trading revenue has come down now this year and it will be close to the same level of 18% to 19% only.
Nirav Jimodia:
Got it, sir. Thank you so much and wish you all the best.
Moderator:
Thank you. A reminder to all the participants, you may press star and one to ask a question. We will take the next question from the line of Abhishek Porwal from DR Choksi. Please go ahead.
Abhishek Porwal:
Good evening, sir. Thank you for taking up my question. So, most of my questions have been answered. So, just one question. So, sir, given that the phase one is now running on for the ABS, and what is the current thinking of like on phase two expansion? Like is there a timeline or utilization milestone you are targeting before committing to it? And separately, what's your thought upon competition from ABS imports coming in from Taiwan and Korea? Like are these imports competitive on price versus domestic products? Thank you.
Rakesh Nayyar:
The imports have been coming. Imports will continue to come because the domestic capacity is far lower than the actual demand in the country. So, the imports is not a concern at the moment. As far as our own capacity utilization is concerned, as I said that we are currently, after the modified arrangement, at 65% of the original rated capacity. And we expect that we should be able to do close to 85%, 90% or 80% of that capacity this year now. As far as the second line is concerned, we are working on that. And that is irrespective of the fact that what has happened to one piece of equipment. We are working on the second line.
Abhishek Porwal:
Okay. That's it from my side. Thank you so much.
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Moderator:
Thank you. We will take the next question from the line of Sailesh Raja from B&K Security. Please go ahead.
Sailesh Raja:
Sir, I joined a call late. Apologies if this has already been answered. With styrene monomer prices currently at elevated levels, USD 1,500. So, how are you approaching the procurement decision, especially considering our typical inventory holding of two months? So, in this environment, would we look to reduce inventory days in anticipation of your price correction or continue procuring at higher prices and rely on pass-through mechanism with customers? So, could you please talk about that?
Rakesh Nayyar:
No, we are procuring. Of course, the regular suppliers are not available. Procuring itself is a task today. And we are right now balancing the material available with the demand here. And we are concentrating mainly on meeting at least the domestic demand. And we are aware that inventory loss might come the moment the whole situation normalizes. So, as and when it happens there will be some inventory loss to us. And we are trying to find ways that we are able to contain that if as and when it happens. So, all kinds of things we are doing in terms of even passing through the extra cost, sourcing the raw material, and matching it with our requirements or the domestic demand. So, efforts are on towards that.
Sailesh Raja:
Okay. Sir, given the current raw material supply constraint affecting some polymer players, so do you see scope for faster customer approvals for new grade in the SPC, Xmold division for us, considering that such approval typically it will take a year's time? So, how do you see that?
Rakesh Nayyar:
We have not faced any difficulty there. But OEMs will take their own time. This is not the case with the non-OEMs. The non-OEMs earlier also were not taking very long. And we are not facing such thing at the moment.
Sailesh Raja:
Okay, okay. Sir, in the SPC division, could you elaborate on specific initiatives that we are taking to increase the volume and also the potential the cross-sell products through Xmold existing automotive customer base? And also, when do you think that we can reach?
Rakesh Nayyar:
We are not doing any cross-sell in the sense that all styrenic compounding is being done by us. And we continue to do what we were doing. Good thing for Xmold is that they were never an appliance compounding Company. But now with Sri City being there, and a lot of OEMs are there in Sri City, air conditioning companies are there in Sri City. So, Xmold also is looking at supplies to air conditioning companies and other OEM. And they have been successful in onboarding two of the AC manufacturers there.
Sailesh Raja:
Okay, okay. Great, sir. Sir, when we are expected to touch 50,000 volumes in SPC and Xmold divisions?
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Rakesh Nayyar:
Our compounding volume should see a jump this year. So, we hope that by, if not in FY27, but FY28, we should be certainly at 50,000.
Sailesh Raja:
Okay, okay. Great, sir. Sir, one last question. In ABS, while we are targeting around 36,000 tons of volume in FY27, could you clarify how much additional demand we expect from our internal consumptions, particularly from SPC, Xmold division? And also wanted to know the PBT break-even capacity in ABS.
Rakesh Nayyar:
How much we will supply to our own internal consumption is very difficult to predict, because that is based on the ABS compounds. We have started the ABS compounds, but acceptability, the new customers coming in, approving the grades, very difficult to say that. But yes, we would be increasing our focus on that. And in any case, Xmold is not in the ABS compounding at the moment.
Sailesh Raja:
Okay, sir. Thank you, sir.
Moderator:
We have the next follow-up question from the line of Aditya Khetan from Smifs Institutional Equities. Please go ahead.
Aditya Khetan:
Thank you, sir, for the follow-up. Sir, my first question is on to the polystyrene. It has been, sir, four years when we have last de-bottlenecked the capacity, and we are also nearing about 85% utilization, almost near peak. Any plans, sir, to further de-bottleneck that capacity?
Rakesh Nayyar:
Yes, we are. Actually, we did not de-bottleneck four years back. We set up a new line altogether four years back, or three years back and now we are evaluating the de-bottlenecking.
Aditya Khetan:
And this will be done by, sir, April '27-28.
Rakesh Nayyar:
I just said we are evaluating. I cannot give you a timeline for that.
Aditya Khetan:
Perfect. Sir, on to the spreads part, if you can update, like, what are the current spreads between polystyrene and SM, pre-war and today, and where do you see this trajectory going ahead?
Rakesh Nayyar:
You are asking something which is very difficult to answer even, because the way things are globally, first getting the material is a concern. It is not that what margins are there, getting the material itself is a concern at the moment. But then, you see, the delta will not sharply increase. The deltas, which were earlier closer to, say, for GP for 200, they have moved closer to 275 or so MT.
Aditya Khetan:
Okay, $270 per ton for GP you are saying.
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Rajeev Nayyar:
275, there about, maybe some transactions may have happened. Depending upon every day, the prices are changing now. The situation is very fluid. You cannot really define what delta, there is no standard thumb rule that this will be the delta now. So, the prices are changing, varying every day. Today, the styrene is, say, at $1,500. So, the $1,700, $1,800 could be for the landed cost of polystyrene GP in India closer to that. So, 275, you can assume.
Aditya Khetan:
Got it. Sir, my third question. So, in inventory gain, benefit has been booked in this quarter, or subsequent quarters also we will see some benefit?
Rakesh Nayyar:
We do not have some such specific entry for inventory gain as and when material comes in, it gets sold. So, whatever loss profit comes in, it gets booked in the business. So, there is nothing such that the inventory gain has to be booked or inventory loss has to be booked. It is the transaction happening, material has come in, we have sold it, whether I made loss or gain, it is there in the balance sheet, it is there in the accounts.
Aditya Khetan:
Got it. So, my next question is on to the ABS. So, on to the Phase-II ABS. So, that is planned by FY28. Considering, sir, the Phase-I also we are operating at lower capacity. Any idea, sir, Phase-II will come by FY28, are we sticking on to that?
Rakesh Nayyar:
As of now, yes, we are still aiming that only. As far as the capacity is concerned, there is enough demand in India. We had an unfortunate incident that one of the critical equipment had developed some snag and that is something serious because it has to be removed and then repaired and which is time-taking process. But then our collaborators have at least found an alternate arrangement for us for which we are able to operate at 65% and which we are doing now.
Aditya Khetan:
Got it, got it. Sir, just one last question. So, the recent government decision to remove the import duty on ABS, are we seeing, sir, some good imports of ABS are coming in and B, because our samples are also now into the market. How are competitive versus imports coming in on to pricing, on to the quality front?
Rakesh Nayyar:
Right now, as I said, very difficult to compare because whatever material is coming, if booked in the month of March, that March prices were ruling at $2,400 for ABS. So, if that comes in today, with duty or no duty, the landed price of that itself will be INR 230. At the current dollar of INR 95, it will be at INR 230 a kg and plus expenses Local prices are less than that. So, there is no threat from the competition as far as imports are concerned in terms of pricing is concerned.
Aditya Khetan:
Sir, directional wise, if you can just say, like for FY27, because so new capacities of ABS and EPS have come in, so some higher cost from that and consequently, assuming if this war situation stabilizes, so prices are anticipated to come down, how you see the directional wise
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EBITDA for FY27 can be maintained on to that number of FY26 or it could be slightly lower. Any directional wise, sir, just ask.
Rakesh Nayyar:
EBITDA, if I have to see the first three months, I cannot predict anything. If situation normalizes, then in the normal circumstances, because the volumes will be better, we should be doing better than the last year.
Aditya Khetan:
Thank you, sir. That's it.
Moderator:
Thank you. We will take the next question from the line of Pritesh Chheda from Lucky Investments. Please go ahead.
Pritesh Chheda:
Just one clarification, a couple of them. So, on your pricing, which you mentioned, about $2200 of ABS booking, so this is material to arrive in May or this is the material which arrived in March?
Rakesh Nayyar:
I said the material which was booked in March, that is what we heard. We have not bought, but market information is that material booked in March was for at $2300, even $2400. So, that arrival maybe now in April, may arrive in May. If it arrived in April also, it will get sold in May.
Pritesh Chheda:
Okay. So, booked in March was $2200 and then you mentioned a number of $1600, that was booked in?
Rakesh Nayyar:
That is the styrene monomer price I mentioned.
Pritesh Chheda:
Okay. The other thing is, considering, so one of the comments you mentioned that it's an ongoing business for you, and on the inventory question that you answered too. So, is it fair to assume that what we see as profitability in Quarter 4, a large part of the ongoing profitability without any material inventory number floating, flowing into that operating number?
Rakesh Nayyar:
Sorry I could not get you.
Pritesh Chheda:
So, to one of the questions you answered about the normal nature of the business being we buy inventory and we process it and sell it during the quarter. So, is it fair to assume that the quarter gone by doesn't have any major M2M on account of inventory flowing into the P&L?
Rakesh Nayyar:
It's a process. See, whatever material has come to me, I process, I got increased price maybe, but then I bought higher price material also. I have supplied even when the market was high, I have met my some contractual commitments which were in the month of March, when prices were skyrocketing, we even met our contractual commitments which were at the old
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prices. So, it's a part of business. I can't segregate into the pockets that what consignment came and what price it got sold or something.
Pritesh Chheda:
Okay. The other question is, is it fair to assume and based on your experience, when you have these raw material supply crunch, typically in the system whereby you have a higher material price flowing in. So, materially the profitability of the business is higher usually versus a scenario which was last year, let's say where you had a continuously falling styrene price for the first nine months. So, a higher styrene price automatically brings in a slightly better profitability, is that assumption correct?
Rakesh Nayyar:
There are two ways to look at it. The higher price of styrene, if it leads into a better spread as far as polystyrene is concerned, yes, then it is beneficial, but then it generally doesn't happen because higher styrene monomer prices kills the demand, particularly the sectors which can wait or particularly the people who will start going and looking into their pockets and saying, whatever is the old material, let me consume that. The warehouses, the supply chain will rather get emptied there. So, the material doesn't get sold there and actually, you land up holding the old stock, which is high price stock and if the prices go down, it finally leads into an inventory loss also. So, too much of high price does not guarantee that there'll be better profitability. It kills the demand also.
Pritesh Chheda:
But in a scenario like this, based on your experience, where a shortage of material is throughout the globe, is it a favorable scenario for, generally for, so let's say there were imports happening into the country. I am assuming supply chain globally are seeing the PetChem related supply shocks. So, it's a slightly favorable situation in terms of profitability. Is that correct or even that assumption is challenged?
Rakesh Nayyar:
There is no import duty on the imported raw materials or imported polymers also, be it polystyrene or ABS or SM. There's a zero duty. SM already was on zero duty from all the FTA countries, but then there was a duty on PS and ABS. So, to that extent, their import cost goes down now. And as far as the global shortage is concerned, but then again, as I said, that the non-OEM sector, the market has already shrunk. April itself, we are seeing now that the market is shrinking as far as non-OEM sector is concerned. So, the prices which went up in the month of March, the prices are coming down. Of all polymers, substantial decrease in prices have happened because people want to push their material and whereas there is no demand coming in.
Pritesh Chheda:
Okay, sir. Okay. Thank you very much, sir. I will get back if I have more questions. Thank you.
Moderator:
Thank you. We will take the next question from the line of Rahul Agarwal from Ikigai Asset Managers. Please go ahead.
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Rahul Agarwal:
Thank you for the follow-up. Rakesh Ji, one question is for the mass ABS segment, assuming whenever we ramp up to 70,000 tons for the phase one, and you said the market is about 50-50 on OEM, non-OEM, what would be a preferred mix for us? Like what would we want to do eventually with the capacity?
Rakesh Nayyar:
We would like to be present in all segments. Like in polystyrene, we are in all the segments. We are with all the OEMs. We are there for all the non-OEM guys also. So, we would like to be there. It’s only that in the OEM segment, the process to get your grades approved and acceptance process is longer. So, till that happens, we would be in the non-OEM segment. The moment that happens, we will be in OEM sector also.
Rahul Agarwal:
Right. So, it largely should reflect the industry mix, right? It should be like 50-50 overall whenever we reach to like 140,000 tons.
Rakesh Nayyar:
Eventually, going forward, once we had the grades are totally established in the market, we are fully operating, and then that is the scenario, we will have it.
Rahul Agarwal:
Got it, sir. And, sir, second question was on the operating cash flow. Look at the cash flow statement. I see a bit of higher working capital investment, largely driven by higher debtor, INR 520 crores as of 31st March. What has changed over here? How should I read the operating cash flow generation?
Rakesh Nayyar:
Our selling prices, our purchase price, everything went up in the month of March. So, the selling prices being higher, the debtor’s numbers will go up, plus ABS has come in. So, their volume numbers will go up. Inventory is concerned. Not only the polystyrene inventory is there, but ABS inventory has also come in. So, all that adds to that.
Rahul Agarwal:
All right, got it. So, basically, going forward, sustainable basis, 30-35 days of receivable cycle, is that fair to assume?
Rakesh Nayyar:
I know that our net working capital has gone up there because of the increased prices, increased material which has come in, ABS material has come in. So, but then, once these things become normal now, they will go back to where we were earlier.
Rahul Agarwal:
Got it. Got it. Thank you so much, sir, and wish you best of luck for Fiscal 2027. Thank you so much.
Rakesh Nayyar:
Thank you, Rahul.
Moderator:
Thank you. We will take the next question from the line of Nirav Jimodia from Anvil Wealth. Please go ahead.
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Nirav Jimodia:
Yes, sir. Thanks for the opportunity again. Sir, two questions. So, first is on the specialized grades of PS. I guess they were also imported into India and like because of all this crisis which we are seeing, possibly that specialized grades would be restricted in terms of coming to India. So, A) Have we seen the premiums for those specialized grades expanded in line with you mentioned for GP? And B) How our volumes have moved for the specialized grades in the month of April for that particular applications?
Rakesh Nayyar:
I do not know which grades you are talking about, Nirav, because the...
Nirav Jimodia:
No sir, like we produce some specialized grades. So, in one of the earlier calls, you mentioned that those grades come on premium over the normal grades.
Rakesh Nayyar:
Yes. You are talking about some imports happening.
Nirav Jimodia:
Yes. So, like there are some specific grades which are for higher end refrigerators or washing machines.
Rakesh Nayyar:
If they have been imported, they certainly would be at much higher price than the normal commodity grades. There must be a difference of almost $200 plus there. Grades which have been imported as specialized polystyrene grades will be higher at least by $200 over the normal grades imported.
Nirav Jimodia:
Correct. So, I just wanted to understand like do we have presence in terms of volumes for those specialized grades?
Rakesh Nayyar:
We are there. We are in all kinds of refrigerators and AC grades. Practically, every user, maker of refrigerator uses our polystyrene.
Nirav Jimodia:
Correct. So, to that extent, that benefit would also accrue to us whenever those users...
Rakesh Nayyar:
That is what we talk about the value-added grades every time.
Nirav Jimodia:
Correct. But I just wanted to understand in terms of the expansion of the premium part which you rightly addressed. The second question is on the EPS part like if we see the demand for India was close to around 1,50,000 tons. So, is it also very price-sensitive in terms of from the consumer point of view and also if you can share your thoughts in terms of how are we seeing the growth in EPS since we have expanded the capacity in FY27?
Rakesh Nayyar:
The EPS is price-sensitive. Every product is but then at the lower end, yes. But then for the packing segment, for the construction segment and cold storages, the demand has been great. It has increased last year. These are the segments from where the demand growth came in. As far as the capacity increase, we have to target more of the construction side of it including the cold storages also and 3D panels. We expect going forward the demand would
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increase in these segments and we will be able to supply plus export market because our grades have been approved in Europe and during the peak months, we were finding that we are not able to meet the demand there. We can't supply because we have to supply to the local market. So, this additional capacity will help us in starting our exports of EPS.
Nirav Jimodia:
Correct. So, safe to assume that at least in line with the volume growth guidance which you mentioned, similar volume growth could be possible in EPS like on a consolidated basis for the Company as a whole?
Rakesh Nayyar:
We have said that along with the market growth, we will also grow this year. But then all the volumes put together, depending upon the global situation, the war situation, if everything becomes normal by June end and July sees the normal behavior in the global market, we should be doing 8% to 10% volume growth this year.
Nirav Jimodia:
Perfect, sir. Perfect. Thank you so much.
Moderator:
Thank you. Ladies and gentlemen, as there are no further questions from the participants, we now conclude the question-and-answer session. I now hand the conference back to the Management for closing comments. Over to you, sir.
Rakesh Nayyar:
Thank you all for participating in this Earnings Conference. If you have any further questions or would like to know more about the Company, please reach out to our IR managers, Ad Valorem Advisors. Thank you so much. Thank you.
Moderator:
Thank you, members of the Management. On behalf of Supreme Petrochem Limited, that concludes this conference. Thank you all for joining us today and you may now disconnect your lines.
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