Skip to content

    Supreme Petrochem Q1 FY27 earnings call

    SPLPETRO
    Chemicals·29 Jul 2026
    Management Summary

    Supreme Petrochem Limited reported strong financial growth in Q1 FY27, with revenue up 22% and operating EBITDA up 188%, driven by wider international deltas. However, sales volumes declined by 24.5% due to geopolitical tensions in West Asia, supply chain disruptions, and subdued non-OEM demand. The company is progressing with significant expansion projects, including new EPS and polystyrene lines, with a total CAPEX of approximately ₹900 crores funded by internal accruals.

    Highlights

    6

    • Revenue from operations increased by 22% year-on-year to ₹1693 crores.

    • Operating EBITDA grew strongly by 188% year-on-year to ₹331 crores.

    • Operating EBITDA margins improved significantly to 19.53%.

    • Net profit after tax stood at ₹236 crores, with a PAT margin of 13.96%.

    • Wider delta in international markets between Styrene Monomer and downstream products benefited results.

    • Successfully completed Phase 2 expansion of EPS capacity.

    Concerns

    5

    • Sales volume declined by 24.5% to 70,842 metric tons compared to the previous year.

    • Negligible exports due to West Asia crisis and subdued demand from the non-OEM segment.

    • Geopolitical tensions in West Asia caused significant interruption in liquid and container shipments, leading to supply chain challenges.

    • Temporary suspension of import duties led to increased imports, eroding market share for domestic producers.

    • Current high margins are considered an 'aberration' due to strong global deltas and are expected to normalize over time.

    Key financials

    Single quarter

    09 metrics
    1. 01Revenue from Operations₹1,693 Cr+22%YoY
    2. 02Operating EBITDA₹331 Cr+1.9%YoY
    3. 03Operating EBITDA Margin19.5%
    4. 04Total EBITDA₹348 Cr
    5. 05Total EBITDA Margin20.3%

    Capital allocation

    1
    high confidence
    CategoryHeadline
    Capex

    ₹900 crores

    entirely through internal accruals

    Guidance & targets

    8
    CategoryTargetPriority
    Capacity
    Compounding capacity
    80,000 tons per annum
    		High
    Capacity
    New polystyrene production line completion
    Completed
    		High
    Capacity
    Total installed polystyrene capacity
    3,80,000 tons per annum
    		High
    Capacity
    All new capacities (ABS line 2, XPS, compounding, PS 5th line) on board
    On board
    		High
    Capacity
    Terminal ABS capacity after full expansion
    140,000 nameplate capacity
    		High
    Capex
    Total estimated investment for expansion projects
    ₹450 crores
    		High
    Capex
    Total CAPEX for all projects
    closer to ₹900 crores
    		High
    Efficiency
    Asset turn for all expansions (ABS, polystyrene, XPS boards)
    twice
    		High

    What to watch in Q2 FY27

    5

    Normalization of global deltas and impact on margins

    next quarter
    CurrentOperating EBITDA margin at 19.53% (aberration)
    TargetNormalization of deltas and corresponding margin levels

    Why it matters

    Management indicated current high margins are temporary, so tracking their normalization will be key to understanding sustainable profitability.

    This margin which has come in, is like an aberration because of the global deltas were very-very strong from USD200 for GPPS, global deltas have gone up to plus 300 plus and for HIPS which used to be around USD275 to USD300 went upto 400 plus. Those aberrations will get normalized over a period of time.

    Risks & concerns

    4
    RiskSeverity

    Geopolitical tensions and supply chain disruptions in West Asia

    Conflict in West Asia, Strait of Hormuz disruptions, and styrene plant shutdowns led to significant interruption in shipments, increased freight rates, and longer voyage times, impacting raw material availability and exports. — Management acknowledged

    high

    Subdued demand from non-OEM segment

    Non-OEM demand was down almost 50% due to high prices and gas supply issues, though management noted it is now stabilizing. — Management acknowledged

    medium

    Increased imports due to duty waiver

    Temporary suspension of import duties on commodity polymers led to increased imports, eroding market share for domestic producers. — Management acknowledged

    medium

    Normalization of global deltas and margin compression

    Current high operating margins (19.53%) are considered an 'aberration' due to unusually strong global deltas and are expected to normalize over time. — Management acknowledged

    medium

    Q&A highlights

    7

    “As I said in my opening remarks, the demand from the non- OEM segment was very subdued. Almost 50% demand from the non-OEM segment had evaporated in this quarter. That could partly be because of the high prices. Also, the downstream processors, had issues with the gas supply availability. That could also be one of the reasons. The price resistance from the non-OEM segment was certainly there.”

    Clarifies the reasons for volume decline, attributing it to high prices, gas supply issues for non-OEMs, and the impact of duty waivers on imports.

    asked by Nirav Jamudia

    2 min read5 chapters

    Detailed Narrative

    01

    Financial Performance Overview

    Supreme Petrochem reported a robust financial performance in Q1 FY27, with revenue from operations growing 22% year-on-year to ₹1693 crores. Operating EBITDA saw an impressive 188% year-on-year increase, reaching ₹331 crores, and operating EBITDA margins expanded to 19.53%. The net profit after tax stood at ₹236 crores, resulting in a PAT margin of 13.96%, primarily benefiting from wider international deltas between Styrene Monomer and downstream products.

    02

    Operational Challenges and Volume Decline

    Despite strong financial metrics, sales volume declined significantly by 24.5% year-on-year to 70,842 metric tons. This was largely attributed to negligible exports due to the West Asia crisis and subdued demand from the non-OEM segment, which saw a nearly 50% reduction. Geopolitical tensions in West Asia also caused severe supply chain disruption🌐s, including styrene plant shutdowns and increased freight rates, forcing the company to establish alternate supply arrangements.

    03

    Expansion Projects and Future Capacity

    The company is actively pursuing several expansion projects with a total estimated CAPEX of approximately ₹900 crores, funded entirely through internal accruals. This includes the completed Phase 2 expansion of EPS capacity, a new wide-width EPS board line of 150,000 cubic meters, and an expansion of compounding capacity from 50,000 to 80,000 tons per annum, expected by June 2027. Additionally, a new 80,000 tons per annum polystyrene production line is planned for completion by December 2028, increasing total polystyrene capacity from 3,00,000 to 3,80,000 tons per annum.

    04

    Market Dynamics and Margin Outlook

    Management noted that the current high margins are an 'aberration' driven by unusually strong global deltas (GPPS +300+, HIPS +400+) and are expected to normalize📎 over time⏳. While non-OEM demand was initially subdued due to high prices and gas supply issues, it is now stabilizing. The company's growth strategy focuses on exports, particularly driven by appliance manufacturers under PLI schemes, and on serving value-added customers with strict credit discipline in the ABS compounds market.

    05

    Raw Material and Import Landscape

    Raw material (styrene monomer) prices remained elevated during the quarter, with landed India CIF prices around USD1300 and a peak of USD1500+. The temporary suspension of import duties on commodity polymers led to increased imports, estimated around 20,000 tons, which impacted domestic producers' market share. However, management indicated that the non-OEM segment has reconciled to the increased prices, suggesting a potential rebound in demand.

    This is an AI-generated summary of a publicly available earnings call transcript.