Supreme Petrochem Limited — Q4 FY26 earnings call

Call held 30 Apr 2026

Management summary

Supreme Petrochem reported a strong Q4 FY26 with 3% YoY revenue growth and 75% YoY operating EBITDA growth, driven by higher volumes and spreads. The company successfully commissioned its EPS Phase-II expansion and remains debt-free. However, the full year saw an 11% revenue decline due to lower raw material prices, and the non-OEM sector faces demand softness. An equipment issue limits ABS plant capacity, and raw material price volatility remains a key concern.

Highlights

  • Q4 FY26 revenue from operations grew 3% YoY to INR 1,587 crores, driven by higher volumes and better spreads.

  • Operating EBITDA for Q4 FY26 increased 75% YoY to INR 253 crores, with margins improving to 15.9%.

  • EPS Phase-II expansion at Nagothane complex was successfully commissioned on April 14, 2026, enhancing capacity from 85,000 TPA to 115,000 TPA.

  • The Company maintained a debt-free status and reported an investable surplus of INR 700 crores as of March 2026.

  • Board recommended a total dividend of INR 10.5 per equity share for FY26.

Concerns

  • FY26 full-year revenue declined 11% YoY to INR 5,338 crores, primarily due to 17% lower average styrene monomer prices.

  • Non-OEM sector demand experienced a 'big beating' due to high prices, labor unavailability, and gas shortages, particularly in April 2026.

  • ABS plant is currently operating at only 65% of design capacity (~45,000 tons from 70,000 tons) due to an equipment snag.

  • Raw material price volatility and supply chain disruptions (Strait of Hormuz) led to increased freight costs and uncertainty in contracting.

Key financials

2 periods

Q4 FY26

  • Revenue
    ₹1,587 Cr
    YoY +3%
  • Operating EBITDA
    ₹253 Cr
    YoY +75%
  • Operating EBITDA Margin
    15.9%
  • PAT
    ₹168 Cr
  • PAT Margin
    10.6%
  • Sales Volume
    1,00,664 tons
    YoY +5.4%

FY26

  • Revenue
    ₹5,338 Cr
    YoY -11%
  • Operating EBITDA
    ₹515 Cr
  • Operating EBITDA Margin
    10.4%
  • PAT
    ₹327 Cr
  • PAT Margin
    6.1%
  • Sales Volume
    3,63,203 metric tons
    YoY +2%

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 internal accruals
    • Infrastructure and related activities, with big monies for PS and EPS pending clarity on IOC's SM plant commissioning
    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. And the CAPEX for the Fy-27, sir? 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.
  • Debt Debt disclosed
    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.
  • Dividend ₹8/share (final)
    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.
  • Liquidity Cash ₹700 Cr Investable surplus as of March 2026.
    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.

Guidance & targets

Volume

  • Overall Volume Growth Volume · this year (FY27) · Medium confidence 8% to 10%
    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.

    — Rakesh Nayyar

  • Xmold Volume Growth Volume · this year (FY27) · Medium confidence 50% to 60% more
    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.

    — Rakesh Nayyar

  • Compounding Volume Volume · FY28 (if not FY27) · Medium confidence 50,000
    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.

    — Rakesh Nayyar

Capacity

  • EPS Capacity Capacity · commissioned April 14, 2026 · High confidence 115,000 TPA

    From 85,000 TPA today

    the EPS Phase-Il 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.

    — Rakesh Nayyar

Capacity Utilization

  • ABS Capacity Utilization Capacity Utilization · this year (FY27) · Medium confidence 85%, 90% or 80%

    From 65% today

    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.

    — Rakesh Nayyar

  • Xmold Capacity Utilization Capacity Utilization · this year (FY27) · Medium confidence 65% to 70%

    From 40-45% today

    Like last 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.

    — Rakesh Nayyar

Project Timeline

  • ABS Phase-II Expansion Project Timeline · FY28 · Medium confidence FY28
    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-l also we are operating at lower capacity. Any idea, sir, Phase-ll will come by FY28, are we sticking on to that? As of now, yes, we are still aiming that only.

    — Rakesh Nayyar

What to watch in Q1 FY27

ABS Plant Capacity Restoration

Ongoing, resolution expected
Current Operating at 65% of design capacity (~45,000 tons)
Target Restoration to 100% capacity (70,000 tons)

Why it matters

Full capacity utilization of the ABS plant is crucial for maximizing production and revenue from this segment.

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.

Risks & concerns

  • Raw material price volatility (Styrene Monomer)

    high

    Styrene monomer prices rose sharply in March 2026 due to West Asia conflict and Strait of Hormuz disruption, from ~$1,000/ton to ~$1,650/ton, then moderated to ~$1,500/ton.

    Management acknowledged

  • Supply chain disruption

    high

    West Asia conflict and Strait of Hormuz disruption led to increased shipping times and freight rates, impacting exports and raw material availability.

    Management acknowledged

  • Potential inventory losses

    medium

    Management is aware of potential inventory losses if raw material prices normalize and drop, making it difficult to estimate gains/losses currently.

    Management acknowledged

  • Softness in non-OEM demand

    medium

    Non-OEM sector demand is significantly impacted by high prices, labor unavailability, and gas shortages, particularly in April 2026.

    Management acknowledged

  • ABS plant equipment issue

    medium

    One critical equipment in the mass ABS plant developed a snag, limiting operations to 65% of design capacity (~45,000 tons from 70,000 tons) for the time being.

    Management acknowledged

Q&A highlights

4 direct, 1 evasive
Inventory gains/losses due to raw material price volatility Evasive
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.

Management highlighted the extreme difficulty in quantifying inventory gains/losses due to highly dynamic raw material prices and supply disruptions, indicating significant uncertainty.

Asked by Aditya Khetan

Impact of high prices on OEM vs non-OEM demand Direct
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.

Management clearly differentiated demand trends, noting strong OEM demand but significant weakness in the non-OEM sector due to multiple factors, which could impact overall volumes.

Asked by Aditya Khetan

ABS plant capacity restoration and future utilization Partial
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.

Clarified that the ABS plant is operating at 65% of its original capacity (45,000 tons from 70,000 tons) due to an equipment issue, but full restoration is planned once the failure is resolved, impacting near-term production.

Asked by Aditya Khetan

FY27 volume growth guidance given ABS and EPS expansions Partial
Because the 1st Quarter, we don't know where we are at the moment. 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.

Analyst questioned the seemingly low 8-10% volume growth guidance despite capacity additions, and management attributed it to Q1 uncertainty and ongoing abnormal export conditions (longer shipping times, higher freight).

Asked by Aditya Khetan

Raw material sourcing strategy and inventory levels Direct
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 recently.

Management explained their pricing strategy for commodity vs. value-added grades and confirmed sourcing from Asia and China, while noting the absence of recent PS imports.

Asked by Rahul Agarwal

Haryana CAPEX plans and timeline Partial
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.

Management clarified that major PS/EPS capex in Haryana is on hold pending clarity on IOC's SM plant commissioning, indicating potential delays in future capacity additions.

Asked by Manish Ostwal

Impact of high styrene prices on profitability and demand Direct
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.

Management provided a nuanced view, explaining that while high prices can improve spreads, they also kill demand and increase inventory loss risk, challenging the assumption that higher raw material prices automatically lead to better profitability.

Asked by Pritesh Chheda

Operating cash flow and working capital increase Direct
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.

Management attributed the higher working capital investment and increased debtor numbers to the sharp rise in selling and purchase prices in March, along with the new ABS volumes.

Asked by Rahul Agarwal

2 min read 6 chapters

Detailed narrative

Q4 FY26 Performance Overview

Supreme Petrochem delivered a robust Q4 FY26, with revenue from operations growing 3% YoY to INR 1,587 crores. This performance was primarily driven by higher volumes and improved spreads. Operating EBITDA saw a significant 75% YoY increase, reaching INR 253 crores, and operating EBITDA margins expanded to 15.9%. Net profit after tax stood at INR 168 crores, with a PAT margin of 10.59% for the quarter.

FY26 Full Year Performance & Raw Material Impact

For the full fiscal year 2026, revenue from operations was INR 5,338 crores, marking an 11% decline YoY. This reduction was mainly attributed to a 17% lower average styrene monomer (SM) price during the year, despite a nominal 2% volume growth. Full-year operating EBITDA was INR 515 crores with a margin of 10.37%, and PAT was INR 327 crores with a margin of 6.13%.

Operational Highlights & Capacity Expansion

The company's sales volume for manufactured products increased 5.4% YoY in Q4 FY26 to 100,664 tons, and 2% YoY for the full year to 363,203 metric tons. A significant achievement was the successful commissioning of the EPS Phase-II expansion project on April 14, 2026, which boosted EPS capacity from 85,000 TPA to 115,000 TPA. The mass ABS plant, however, is currently operating at 65% of its design capacity (~45,000 tons from 70,000 tons) due to an equipment snag, though management expects 85-90% utilization this year.

Market Demand & Product Segments

Demand from OEM segments remained healthy, but the non-OEM sector experienced significant softness, particularly in April 2026. This weakness was attributed to high prices, labor unavailability, and gas shortages. The company aims for 8-10% overall volume growth in FY27, contingent on market normalization. For Xmold, volumes are expected to grow 50-60% this year, with utilization targeting 65-70% from 40-45% in FY26.

Raw Material Dynamics & Pricing Strategy

Styrene monomer prices were largely stable until February 2026 but surged sharply in March 2026, from ~$1,000/ton to a peak of ~$1,650/ton, moderating to ~$1,500/ton. This volatility, driven by the West Asia conflict and Strait of Hormuz disruption, led to increased freight costs. Management stated that for commodity grades, pricing is linked to the landed cost of imported material plus a premium, and incremental pricing is passed on to consumers, though high prices can ultimately kill demand.

Capital Allocation & Shareholder Returns

Supreme Petrochem maintained its debt-free status, holding an investable surplus of INR 700 crores as of March 2026, with all capital expenditure funded through internal accruals. The company plans a CAPEX of approximately INR 250 crores for FY27, primarily for infrastructure and related activities, with major PS/EPS investments in Haryana pending clarity on IOC's SM plant. The Board recommended a final dividend of INR 8 per equity share, bringing the total dividend for FY26 to INR 10.5 per equity share.

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