Supreme Petrochem Limited — Q3 FY26 earnings call

Call held 23 Jan 2026

Management summary

Supreme Petrochem Limited reported a 10% YoY decline in Q3 FY26 operating income to Rs. 1,265 crores, primarily due to falling styrene monomer prices, resulting in an operating EBITDA of Rs. 69 crores (5.47% margin). Despite volume growth in manufactured products, the quarter was impacted by the the suspension of operations at the newly commissioned 70,000 MTPA ABS plant in December due to equipment malfunction. The company remains debt-free with a strong investible surplus and anticipates a better Q4 FY26 driven by stronger OEM demand and stabilizing styrene prices.

Highlights

  • Sales volume of manufactured products increased to 91,265 MT in Q3 FY26 from 85,537 MT in Q3 FY25, representing a 6.7% YoY growth.

  • Sales volume for the nine-month period FY26 increased to 2,62,537 MT from 2,60,416 MT in 9M FY25, showing a 0.81% YoY growth.

  • Styrene monomer prices stabilized and showed an upward bias after November 2025, encouraging processors to increase offtake.

  • The company remains debt-free, funding all capital expenditure entirely through internal accruals.

  • An investible surplus of Rs. 463 crores was maintained as of December 31, 2025.

Concerns

  • Operating income for Q3 FY26 was Rs. 1,265 crores, lower by 10% YoY, primarily due to a significant fall in Styrene monomer (SM) prices from USD 1,040 in Q3 FY25 to USD 810 in December 2025.

  • Operating EBITDA for Q3 FY26 stood at Rs. 69 crores with a margin of 5.47%, reflecting the impact of lower realizations.

  • The newly commissioned 70,000 MTPA ABS plant, which started production in September 2025, had its operations suspended in December 2025 due to a malfunction of critical production equipment, with no definite timeline for restart.

  • The malfunction of the ABS plant is considered a 'big setback' for the company in terms of lost production and missed opportunity to penetrate the market.

Key financials

  1. Operating Income ₹1,265 Cr -10%YoY
  2. Operating EBITDA ₹69 Cr
  3. Operating EBITDA Margin 5.5%
  4. Net Profit ₹30 Cr
  5. Sales Volume (Manufactured Products) 91,265 MT +6.7%YoY

What they filed

Q1 FY27: revenue up 22.1%, net profit up 191.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,506 1,405 1,539 1,387 1,100 −27%1,265 −10%1,587 +3%1,693 +22%
EBITDA125 99 145 115 78 −38%69 −30%253 +74%331 +188%
Net profit90 71 107 81 48 −47%30 −58%168 +57%236 +191%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Capex ₹250 Cr entirely through internal accruals
    • Chennai facility
    • Amdoshi facility
    • Panipat (infrastructure)
    The company continues to remain debt free and all capital expenditure is being funded entirely through internal accruals. ... So, we estimate that we will be doing around Rs. 250 crores to Rs. 275 crores of CAPEX in the coming year. So, that is our estimation. We shall be incurring this CAPEX mainly at Chennai and Amdoshi and infrastructure developments at Panipat.
  • Debt Debt disclosed
    On the balance sheet side, the company continues to remain debt free and all capital expenditure is being funded entirely through internal accruals.
  • Liquidity Cash ₹463 Cr
    As of 31st December 2025, we maintain an investible surplus of Rs. 463 crores.

Guidance & targets

Volume

  • ABS Volume Growth Volume · FY27-28 · Medium confidence 10%
    For FY'27-28, unless I know our likely date of commissioning of ABS, to comment on that is very difficult. And assuming that it is operational by the end of this current financial year, then we should be logging in growth of around 10% or so.

    — Rakesh Nayyar

  • Base Business Contribution to ABS Volume Growth Volume · FY27-28 · High confidence 3-4%
    The contribution from base business would be closer to 3% to 4%.

    — Rakesh Nayyar

  • ABS Business Contribution to ABS Volume Growth Volume · FY27-28 · High confidence 7%
    So, 7% would be from ABS if it started commissioning from this quarter.

    — Aditya Khetan

Capacity

  • EPS Phase 2 Operational Capacity · February or March · High confidence Operational
    And as far as the EPS Phase 2 is concerned, that should be going operational in the coming month in February or by March.

    — Rakesh Nayyar

Utilization

  • Xmold Utilization Rate Increase Utilization · next financial year · High confidence 20-25%
    we are confident that the Xmold in the next financial year would be significantly increasing their utilization rate there. From their current volumes, they should be seeing almost 20% to 25% increase in their volumes.

    — Rakesh Nayyar

  • XPS Utilization Rate Utilization · current · High confidence 70%
    We are currently operating our XPS at around 70%, utilization.

    — Rakesh Nayyar

Revenue

  • Trading Volumes as % of Turnover Revenue · 9M and Q3 · High confidence 20%

    Previously 22-22.5% → 20%

    Our trading volumes are now close to 20% of our total turnover. ... Last year, they were more. They were, I think, closer to 22%, 22.5% or so. But this year, the trading volumes are around 20%.

    — Rakesh Nayyar

Profitability

  • Quarterly Depreciation Rate Profitability · from Q4 · High confidence Rs. 270 million
    Plus, whatever we capitalize going forward for any other project. But as of now, assuming the current capacities Rs. 270 million is what depreciation per quarter will be.

    — Rakesh Nayyar

What to watch in Q4 FY26

ABS Plant Restart and Production

next quarter
Current Operations suspended since Dec 2025 due to equipment malfunction
Target Plant operational and production resumed

Why it matters

Crucial for commercialization of the new 70,000 MTPA capacity and market penetration, directly impacting future revenue and profitability.

But now finally they are here and the work is on. But we have no definite answer from the team yet that by when it can be operated.

Risks & concerns

  • ABS Plant Malfunction and Delayed Restart

    high

    Operations at the 70,000 MTPA ABS plant were suspended in December 2025 due to equipment malfunction, with no definite timeline for restart, leading to lost production and delayed market penetration. The equipment is under warranty and fully insured.

    Management acknowledged

  • Raw Material Price Volatility (Styrene Monomer)

    medium

    Significant fall in SM prices (USD 1,040 to USD 810) impacted Q3 FY26 operating income and margins. Management mitigates this through lean stocks and negotiated contracts.

    Management acknowledged

  • Global Supply/Demand Dynamics and Margin Compression

    medium

    Global styrene prices falling over 20% led to market shrinkage and pressure on PS margins. Demand in Europe and other countries was also lower.

    Management acknowledged

  • Competition from Chinese Imports (ABS)

    low

    While BIS removal opens a window for Chinese ABS, management believes quality, freight, and inland location issues will limit their ability to replace Korean/Taiwanese supplies, with Chinese exports to India for ABS being practically nil.

    Analyst downplayed

Q&A highlights

6 direct, 2 evasive
ABS Plant Restart Timeline Evasive
So, I really cannot tell you when will operations start. But only thing I can tell you at this stage is that the plant ran very smoothly and the commissioning and operations were very smooth when it was operating in the month of October and November. But then this unfortunate incident happened and we had to shut down in December.

Management could not provide a definite timeline for the restart of the critical ABS plant, which was suspended due to equipment malfunction, indicating ongoing uncertainty for a major new capacity.

Asked by Nirav Jimudia

Impact of ABS Plant Malfunction Direct
Right. So, the impact is certainly, it is a big setback for us in terms of the loss of production and the opportunity to penetrate the market in the interim period.

Management acknowledged the significant negative impact of the ABS plant shutdown on production and market entry, highlighting a key operational challenge for the quarter.

Asked by Sailesh Raja

Polystyrene Value-Added Grades & Debottlenecking Evasive
At the moment, I would say that whatever is being discussed is in-house, and since that is still not officially announced, we cannot share that thought with you. So, I will give a pass to your question.

Management indicated internal discussions about new value-added PS grades and potential debottlenecking but refrained from providing details, suggesting future growth avenues are being explored but are not yet concrete.

Asked by Nirav Jimudia

EPS Market Size and Demand Outlook Direct
As far as the demand is concerned, the overall market size of EPS in the country is around 160,000 tonnes p.a.

Management provided a specific market size for EPS in India and noted a 6% pickup in demand in Q3, offering clarity on the core business's market dynamics.

Asked by Nirav Jimudia

Mitigating Earnings Volatility Direct
The raw material volatility is there. But then we have been also mitigating that volatility by keeping very lean stocks or the way we have negotiated our contracts with our suppliers so that we are not fully affected, not that we are fully insulated. But then to some extent, the impact is reduced.

Management detailed strategies to manage raw material price volatility, including lean inventory and contract negotiations, which is crucial for assessing future margin stability and predictability.

Asked by Sailesh Raja

PS Import Trends and Competition Direct
Imports from China are not high. The imports from Thailand are high this year. And also though they all get cleared under this HS code, one needs to go and segregate this data because there is a lot of reprocessed or regranuled polystyrene that gets imported, which is used in an application where the prime grade polystyrene is not used, like wall panels, or photo frames etc.

Management clarified that high PS imports are primarily from Thailand and consist of reprocessed material, not prime Chinese products, alleviating concerns about direct competition from high-quality Chinese dumping.

Asked by Aditya Khetan

ABS Credit Market and Working Capital Management Direct
And like I just said, in for our Xmold also, the customers who wanted extended credits or they were defaulting in payments, we have kind of said no to them now for future supplies. That has of course reduced our volumes in the interim. But we know going forward, it will be good for us.

Management demonstrated a disciplined approach to credit management in the ABS market, prioritizing healthy working capital and customer quality over volume, which is important for long-term financial health.

Asked by Rahul Agarwal

ABS Market Replacement Strategy Direct
Right. So, basically, what we are saying is whatever, you know, 50,000 tonnes kind of ABS imported today, we will replace that market with our products once the customer is satisfied with the company, you know, the master batch mixing. Right?

Management articulated a clear strategy to capture a significant portion of the imported ABS market (50,000 tonnes), highlighting the long-term potential and market opportunity for their new ABS capacity.

Asked by Rahul Agarwal

3 min read 6 chapters

Detailed narrative

Q3 FY26 Financial Performance and Raw Material Impact

Supreme Petrochem Limited reported an operating income of Rs. 1,265 crores for Q3 FY26, marking a 10% year-on-year decline. This was primarily attributed to a significant fall in Styrene monomer (SM) prices, which dropped from an average of USD 1,040 in Q3 FY25 to USD 810 in December 2025. Consequently, operating EBITDA stood at Rs. 69 crores with a margin of 5.47%, and net profit after tax was Rs. 30 crores. For the nine-month period, operating income was Rs. 3,751 crores, with an operating EBITDA of Rs. 262 crores (6.97% margin) and net profit of Rs. 159 crores.

ABS Plant Commissioning and Operational Setback

The company successfully commissioned its 70,000 MTPA ABS plant in September 2025, with production commencing shortly thereafter. However, operations were suspended in December 2025 due to a malfunction of critical production equipment. Management stated that collaborators and suppliers are on-site, but a definite timeline for restarting operations is not yet available. This incident is considered a 'big setback' for production and market penetration, though the equipment is under warranty and fully insured, mitigating incremental CAPEX.

Volume Growth and Market Dynamics

Despite revenue challenges, the company achieved volume growth in manufactured products, with sales reaching 91,265 MT in Q3 FY26, up 6.7% from 85,537 MT in Q3 FY25. For the nine-month period, volumes increased to 2,62,537 MT from 2,60,416 MT in 9M FY25, a 0.81% growth. The EPS market in India, estimated at 160,000 tonnes per annum, saw a 6% pickup in demand during Q3 FY26 after a slower first six months due to extended monsoons affecting cooling device demand. Styrene monomer prices stabilized and showed an upward bias after November 2025, encouraging increased offtake.

Capital Allocation and Financial Strength

Supreme Petrochem maintains a strong balance sheet, remaining debt-free and funding all capital expenditure entirely through internal accruals. As of December 31, 2025, the company held an investible surplus of Rs. 463 crores. For the coming financial year (FY27), the company estimates a CAPEX of Rs. 250-275 crores, allocated across Chennai, Amdoshi, and Panipat (for infrastructure development). The EPS Phase 2 expansion is on track to become operational in February or March 2026.

Xmold Business and ABS Compounding Strategy

The Xmold business is undergoing a transition, focusing on acquiring new customers and discontinuing supplies to non-paying clients. This strategy is expected to lead to a significant 20-25% increase in Xmold's utilization rate in the next financial year. The company has successfully converted its ABS into compounds and marketed them, addressing initial challenges related to color matching due to the 'absolutely white' nature of their ABS. The strategy is to utilize their own ABS for compounding, providing a cushion against raw material volatility.

Outlook and Future Growth Avenues

Management anticipates a better Q4 FY26 (January-March) due to the strongest OEM demand season and stabilized styrene prices. The company is exploring new value-added grades in HIPS and GP polystyrene, though these are in early development stages. While the ABS plant restart timeline is uncertain, the long-term goal is to replace 50,000 tonnes of imported ABS with their products. The company also noted that its XPS segment is performing well, operating at approximately 70% utilization, except during the monsoon period.

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