Styrenix Performance Materials Limited — Q3 FY25 earnings call

Call held 31 Jan 2025

Management summary

Styrenix Performance Materials reported a robust Q3 FY25 with significant year-on-year growth in sales volume (34.4%) and revenue (42.5%). However, profitability saw a sequential decline in PBITDA margin to 10.9% from 15.9% in Q2 FY25, attributed to a higher contribution of lower-margin polystyrene and specific debottlenecking expenses. The company successfully completed the acquisition of Ineos Styrolution (Thailand) Co., Limited, adding substantial ABS and SAN capacities, and is accelerating its domestic ABS expansion plans.

Highlights

  • Q3 FY25 Sales volume increased by 34.4% YoY to 47.5 KT.

  • Q3 FY25 Revenue grew by 42.5% YoY to Rs. 691 crores.

  • Q3 FY25 PBITDA stood at Rs. 75.4 crores, with a margin of 10.9%.

  • Q3 FY25 PAT was Rs. 47.7 crores, with a margin of 6.3%.

  • YTD FY25 (9 months) Sales volume increased by 14.3% to 137 KT.

  • YTD FY25 Revenue grew by 26% to Rs. 2,043 crores.

  • Thailand acquisition completed on January 17, 2025, adding ~125 KT of ABS/SAN capacity.

  • India ABS capacity expansion (50 KT Phase 1) accelerated to mid-2026 from 2028.

Key financials

  1. Sales Volume 47.5 KT +34.4%YoY
  2. Revenue ₹691 Cr +42.5%YoY
  3. PBITDA ₹75.4 Cr +25.7%YoY
  4. PBITDA Margin 10.9% -1.4%YoY
  5. PAT ₹47.7 Cr -31.9%QoQ
  6. PAT Margin 6.3% -4.3%QoQ
  7. YTD Sales Volume 137 KT +14.3%YoY
  8. YTD Revenue ₹2,043 Cr +26%YoY
  9. YTD PBITDA ₹273 Cr +37.9%YoY
  10. YTD PBITDA Margin 13.3% +1.1%YoY
  11. YTD PAT ₹179 Cr +43.2%YoY
  12. YTD PAT Margin 8.8% +1.1%YoY

What they filed

Q1 FY27: revenue up 6.5%, net profit up 149.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue653 691 702 721 615 −6%648 −6%656 −7%768 +7%
EBITDA99 74 82 84 79 −20%75 +1%124 +51%199 +137%
Net profit70 48 53 55 51 −27%44 −8%84 +58%137 +149%
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.

Guidance & targets

Volume

  • Q4 Performance Volume · Q4 FY25 · Low confidence average
    We expect Q4 to be average based on historical industry trends.

    — Bhupesh P. Porwal, Chief Financial Officer

Capacity Expansion

  • ABS Capacity (Phase 1) Capacity Expansion · by middle of 2026 · High confidence 50 KT

    Previously 2028 → 50 KT

    we are also significantly accelerating our plant brownfield expansion in ABS and aim to add as part of Phase 1, 50 KT ABS capacity by middle of 2026 itself, which in our earlier plan was 2028.

    — Rahul Agrawal, Managing Director

  • ABS Capacity (Phase 2) Capacity Expansion · ahead of schedule · Medium confidence 50 KT
    Phase 2 to add another 50 KT of ABS will follow and is expected to be commissioned ahead of the schedule.

    — Rahul Agrawal, Managing Director

  • Polystyrene Capacity Capacity Expansion · after engineering studies in next couple of quarters · Medium confidence 150 KT or 170 KT

    From 100 KT today

    But to go from 100 KT to say 150 KT or 170 KT, we will require results of those studies to come back, and that is likely in the next couple of quarters.

    — Rahul Agrawal, Managing Director

Volume Growth

  • India Business Volume Growth Volume Growth · Medium confidence 15-20%
    For India business, we are maintaining the volume growth guidance.

    — Rahul Agrawal, Managing Director

Capex

  • ABS, SAN, Polystyrene Expansion Capex · High confidence Rs. 650 crores
    our estimations were to the tune of about Rs. 650 crores investment for both the ABS, SAN and polystyrene businesses for their expansion. We still believe and hold on to that number with some margin of error.

    — Rahul Agrawal, Managing Director

  • ABS & SAN Expansion Capex · High confidence Rs. 500 crores
    in terms of ABS and SAN, the investment outlay could be to the tune of about Rs. 500 crores.

    — Rahul Agrawal, Managing Director

  • Polystyrene Expansion Capex · High confidence Rs. 150 crores
    And for polystyrene, to the tune of about Rs. 150 crores.

    — Rahul Agrawal, Managing Director

Risks & concerns

  • Global Spreads Deterioration

    medium

    Global spreads for ABS and polystyrene have deteriorated in the last two quarters, though Indian spreads are much better and the company intends to defend its position.

    Management acknowledged

  • Competition and Imports

    medium

    Healthy competition exists with capacities augmented by Styrenix and competitors, and imports coming into the country, especially for ABS.

    Management acknowledged

  • Thailand Integration & Profitability Timeline

    medium

    The company has only had management control of the Thailand asset for less than two weeks, and it will take 'a little bit of time' to detail the timeline for profitability turnaround and full capacity utilization (currently 55-60%).

    Management acknowledged

  • Delay in Fuel Saving Projects

    low

    Fuel saving projects at other plants (e.g., Katol SAN plant) have been delayed by a quarter or so due to full capacity utilization requiring shutdowns.

    Management acknowledged

Areas of evasion (3)

  • Specific ROCE/profitability numbers for Thailand
  • Exact gross margin for Thailand
  • Firm commitment on pausing future acquisitions

Q&A highlights

1 direct, 1 evasive
Thailand Acquisition Profitability & ROCE Partial
So, we have not given any, kind of estimation on the ROCE. And you are talking about on the Thailand asset, right, essentially? ... But we believe, considering the cost of acquisition, this to be highly attractive and it should be a very rewarding acquisition for the company and its shareholders.

Management provided only qualitative assurance regarding the ROCE and profitability of the newly acquired Thai asset, without offering specific numbers or timelines.

Asked by Pritesh Chheda

Global Spreads vs India Spreads & Thailand Profitability Direct
So, Ajay ji, overall if you look at the global spreads for ABS and polystyrene, we do not see in fact any improvement. ... Indian spreads are much better or at least our spreads are much better, I cannot comment on the entire market, but our spreads are definitely much higher than the global spreads. So, I think that is a position we do intend to defend.

Management directly addressed the analyst's query about global spread trends, clarifying that Indian spreads are outperforming global ones and outlining their strategy to maintain this position.

Asked by Ajay Sharma

Future Acquisitions & Growth Strategy Evasive
So, in the previous question I think someone did mention how attractive this particular acquisition was. So, if there are very attractive opportunities that come your company's way, I am sure you will not want me to ignore them.

Management did not commit to pausing further acquisitions to integrate current assets, indicating an opportunistic approach to M&A which could impact future capital allocation and operational focus.

Asked by Aashish Upganlawar

3 min read 6 chapters

Detailed narrative

Robust Q3 FY25 Performance Driven by Volume Growth

Styrenix Performance Materials reported strong Q3 FY25 results, with sales volume increasing by 34.4% year-on-year to 47.5 KT and revenue growing by 42.5% YoY to Rs. 691 crores. Sequentially, sales volume was up 14.5% and revenue up 6%. PBITDA for the quarter stood at Rs. 75.4 crores, with a margin of 10.9%, a decline from Q2 FY25's 15.9% margin, partly due to a higher contribution from lower-margin polystyrene sales and specific debottlenecking expenses. PAT for Q3 FY25 was Rs. 47.7 crores, representing a 6.3% margin.

Strategic Thailand Acquisition Completed, Expanding Product Portfolio

The company successfully completed the acquisition of Ineos Styrolution (Thailand) Co., Limited on January 17, 2025, for $22 million. This acquisition adds significant capacities, including approximately 31,000 tonnes of rubber, 85,000 tonnes of ABS, and 100,000 tonnes of SAN, with a total capacity of around 125,000 tonnes (ABS+SAN). The Thai asset brings new technologies such as extrusion grade ABS, refrigeration liner grade ABS, water clear high chemical resistance SAN, and bimodal rubber technology, which are expected to create multiple synergies and expand Styrenix's product profile in India and across key Asian markets.

Accelerated ABS Expansion and Polystyrene Capacity Augmentation in India

Styrenix is significantly accelerating its brownfield expansion for ABS in India, with Phase 1 (50 KT ABS capacity) now targeted for mid-2026, ahead of the original 2028 schedule. Phase 2, adding another 50 KT of ABS, is also expected to be commissioned ahead of schedule. For polystyrene, debottlenecking in Q2 FY25 increased capacity from 65 KT to 100 KT, and further expansion to 150 KT or 170 KT is planned, pending engineering studies in the next couple of quarters, with an estimated capex of Rs. 150 crores.

Capex Outlay for India Expansion and Margin Outlook

The company's total estimated investment for ABS, SAN, and polystyrene expansions in India remains around Rs. 650 crores, with approximately Rs. 500 crores allocated for ABS and SAN, and Rs. 150 crores for polystyrene. Management noted that while global spreads for ABS and polystyrene have deteriorated in the last two quarters, Indian spreads remain 'much better' and the company aims to defend these. The Q3 margins were impacted by a higher mix of polystyrene and specific debottlenecking expenses, but overall spreads are considered 'intact and only growing' on a year-on-year basis.

Thailand Asset Utilization and Market Strategy

The newly acquired Thailand plant is currently operating at 55-60% capacity utilization, with Ineos having sold approximately 74,000 tonnes last year against a total capacity of 125,000 tonnes. Styrenix plans to optimize capacity utilization and increase revenue by leveraging existing relationships and new product qualifications across markets like China, Vietnam, Indonesia, Thailand, Japan, and Korea. While India is a potential export market for Thailand products, it is not the sole focus, as significant untapped opportunities exist in other Asian markets.

Operational Efficiencies and Fuel Saving Initiatives

The company has completed its fuel saving exercise largely at the Dahej polystyrene plant, contributing to utility savings in Q3 FY25 and expected higher throughputs in Q4. However, fuel saving projects at other plants, such as the Katol SAN plant, have been delayed by approximately a quarter due to high capacity utilization requiring shutdowns. Management confirmed that debottlenecking expenses contributed to the Q-on-Q rise in other expenses in Q3.

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