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.