Styrenix Performance Materials Limited — Q3 FY26 earnings call

Call held 2 Feb 2026

Management summary

Styrenix Performance Materials reported a mixed Q3 FY26, with standalone EBITDA margins improving by 800 bps and sales volumes growing 7.6% YoY. However, standalone total income and PAT saw declines. The Thailand business faced inventory losses due to price drops and lower capacity utilization, impacting consolidated profitability. The company is on track with its ABS expansion plans and expects power cost reduction benefits in the coming quarters.

Highlights

  • Standalone EBITDA saw a marginal growth of 0.4% YoY to INR75.7 crores in Q3 FY26.

  • Standalone EBITDA margins improved by 800 basis points to 11.7% in Q3 FY26 compared to 10.9% in Q3 FY25.

  • Standalone sales volume for Q3 FY26 grew 7.6% YoY to 51.1 KT.

  • Consolidated sales volume for 9 months FY26 grew 7.4% YoY to 190.7 KT.

  • The company successfully retained 90% of its Thailand customers following the brand change to Absolac and Absolan.

Concerns

  • Standalone total income dipped 6.2% YoY to INR648.8 crores in Q3 FY26.

  • Standalone Profit After Tax (PAT) decreased 7.51% YoY to INR44.3 crores in Q3 FY26.

  • Consolidated EBITDA margin for Q3 FY26 stood at 5%, with PAT margin at 1.9%.

  • Inventory losses were incurred in Thailand due to a significant fall in raw material and finished goods prices over the last 9 months.

  • Polystyrene demand was muted in the first half of the year, leading to sluggish annualized growth for the segment.

Key financials

  1. Standalone Total Income ₹648.8 Cr -6.3%YoY
  2. Standalone EBITDA ₹75.7 Cr +0.39%YoY
  3. Standalone EBITDA Margin 11.7%
  4. Standalone PAT ₹44.3 Cr -7.1%YoY
  5. Standalone Sales Volume 51.1 KT +7.6%YoY
  6. Consolidated Total Income ₹871.3 Cr
  7. Consolidated EBITDA ₹943.5 Cr
  8. Consolidated EBITDA Margin 5%
  9. Consolidated PAT ₹16.3 Cr
  10. Consolidated Sales Volume 66 KT

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.

Capital allocation

high confidence
  • Capex ₹350 Cr internal accruals and potentially a capex loan (not yet taken)
    • Phase 1 ABS expansion ₹350 Cr
    Regarding the capex numbers, so maybe as mentioned last time, the capex, it depends upon a lot of things like purchase orders, how many are raised and all those things. So I think as MD mentioned in earlier questions, we are in line as what we have announced for those capex completion project in H2 of '27 and we'll be completing that. I will just say the number again, which I have mentioned earlier, overall capex for Phase 1 is approximately INR350 crores and which will spill over this year and next year, most of them. And we will finance them with internal accruals as well as maybe a capex loan, which we have yet not taken and have funded it through internal accruals only.

Guidance & targets

Capacity

  • ABS Expansion Phase 1 Capacity · FY27 · High confidence On track for H2 FY27 commissioning
    So like we said, in this current financial or the coming financial year, which is FY '27, we do intend to start Phase 1 of our expansion of ABS, and we are on track.

    — Rahul Agrawal

  • ABS Expansion Phase 1 Utilization Capacity · FY28 · Medium confidence 60-70%
    I believe that would be possible. I think once the capacity comes on stream, we should be able to achieve fairly high capacity utilization numbers.

    — Rahul Agrawal

Cost Reduction

  • Power Cost Reduction Benefits Cost Reduction · Next few quarters · Medium confidence Accruing in coming few quarters
    So we will see those benefits only accruing now in the coming few quarters.

    — Rahul Agrawal

What to watch in Q4 FY26

Power Cost Reduction Benefits Accrual

Next few quarters
Current Agreement effective Feb/March 2026
Target Accrual of benefits in financial results

Why it matters

These benefits are expected to positively impact the company's profitability and margins.

So we will see those benefits only accruing now in the coming few quarters.

Risks & concerns

  • Inventory Losses due to Price Declines in Thailand

    medium

    Inventory losses occurred in Thailand due to significant drops in raw material and finished goods prices over the last 9 months, impacting profitability.

    Management acknowledged

  • Low Capacity Utilization and Operating Leverage Loss in Thailand

    medium

    Lower capacity utilization in Thailand, particularly as utilization comes down, results in a loss of operating leverage, creating a negative drag on profitability.

    Management acknowledged

  • Sluggish Polystyrene Demand

    medium

    Polystyrene demand was muted in the first half of FY26, leading to sluggish annualized growth for the segment, impacting overall volume growth.

    Management acknowledged

  • China Oversupply and Dumping

    low

    While China has overcapacity, management states it has not significantly impacted the Indian specialty ABS market, and BIS withdrawal has not led to increased dumping.

    Analyst downplayed

Q&A highlights

7 direct
Thailand Inventory Build-up and Adjustment Direct
So whether it was Q4 of last financial year or Q1 and Q2 of this financial year, all those production numbers and their corresponding inventory buildups would have kind of correlated with that itself. So there is no effect on a -- I mean there is no as such recording of that inventory in the following quarter. It would have been in the respective quarter where the production would have taken place.

Clarifies the timing and nature of inventory build-up in Thailand, linking it to brand transition and plant testing rather than a Q3 adjustment.

Asked by Aditya Khetan

Thailand Inventory Losses and EBITDA Impact Direct
So there is no adjustment, which I will say again, there is no adjustment. The inventories are always valued based on the accounting standards. And as for -- in a layman terms, I will say the cost or the realization value, whichever is less. So it has been valued accordingly in each and every one of the quarter because the prices of the FG and corresponding raw materials have fell down in 8- 9 months.

Explains that inventory losses were due to falling prices over 9 months, not a one-time adjustment, and impacted revenue realization rather than being an 'adjustment'.

Asked by Aditya Khetan

Consolidated vs Standalone Figures Discrepancy for Thailand Direct
So Aditya, answering your second part, there are some intercompany transactions also which has to be eliminated for the consolidation. So like we buy some rubber from Thailand or Thailand buys SAN from us. So those all sales and purchases has to be corrected when we do the consolidation part, and that's the reason what you are seeing the difference is.

Provides a clear reason for the observed differences between consolidated and standalone figures related to Thailand, attributing it to intercompany eliminations.

Asked by Aditya Khetan

Polystyrene Capacity Utilization and OEM Approvals Partial
I think overall sales in GPPS are not to the tune of the capacities that we have available, and that is also be on account of -- if I look at the 9-month period so far, the first 2 quarters, of course, were very muted from polystyrene demand itself. And there was also a lot of kind of additional volumes coming in.

Highlights that GPPS capacity is not fully utilized due to muted demand in H1 FY26, while HIPS is at 100% utilization with high OEM penetration, indicating differing market dynamics for polystyrene sub-segments.

Asked by Nirav Jimudia

SAN Capacity Utilization and Sourcing from Thailand Direct
SAN from Thailand, I think would work out to be a little bit more expensive for us in India. And again, SAN in Thailand is kind of a premium product for which the realizations in India would be lower than what we can potentially realize in other areas.

Clarifies that sourcing SAN from Thailand for Indian ABS expansion is not feasible due to higher costs and lower realizations compared to other markets.

Asked by Aditya Khetan

ABS Demand/Supply and Pricing Outlook in India Direct
So as far as demand and supply in ABS in India is concerned, there is no significant change. I mean yes, we have had another company also adding in capacity into India, but I believe that is yet to stabilize. So we haven't seen any major impact in the demand supply scenario comparatively speaking in India.

Provides management's view on the stable demand-supply scenario for ABS in India, despite new capacity additions and the withdrawal of BIS regulations.

Asked by Rahul Agarwal

ABS Expansion Phase 1 & 2 Status and Timelines Direct
So like we said, in this current financial or the coming financial year, which is FY '27, we do intend to start Phase 1 of our expansion of ABS, and we are on track. So like I said, I'm going to restrict from giving an exact date and month. But as I mentioned, it is going to be in the second half of the coming financial year.

Confirms that Phase 1 of ABS expansion is on track for H2 FY27, providing clarity on a key growth driver, while Phase 2 is expected post Phase 1 in the next financial year.

Asked by Rahul Agarwal

Styrene Monomer Price Volatility Direct
So I think styrene monomer volatility based on this organization's knowledge and history has remained volatile for the good part of the life of this organization, which is 50 years. And in fact, the styrene monomer prices remained fairly stable, though there was a significant reduction last year, like I mentioned, from the early part of the year towards the end of the year.

Addresses the volatility of styrene monomer prices, noting that while they have been volatile historically, they remained fairly stable last year despite a reduction towards year-end.

Asked by Tushar

2 min read 6 chapters

Detailed narrative

Q3 FY26 Standalone Financial Performance

Styrenix Performance Materials reported a standalone total income of INR648.8 crores in Q3 FY26, marking a 6.2% year-on-year dip from INR692.2 crores in Q3 FY25. Despite this, standalone EBITDA saw a marginal growth of 0.4% YoY, reaching INR75.7 crores, with EBITDA margins improving significantly by 800 basis points to 11.7%. Profit After Tax (PAT) for the standalone entity, however, decreased by 7.51% YoY to INR44.3 crores, with PAT margins at 6.8%. Sales volume demonstrated resilience, growing 7.6% YoY to 51.1 KT.

Q3 FY26 Consolidated Financial Performance and Discrepancy

On a consolidated basis, the company reported a total income of INR871.3 crores for Q3 FY26. The transcript stated consolidated EBITDA as INR943.5 crores and EBITDA margins at 5%. This presents a clear discrepancy, as a 5% margin on INR871.3 crores revenue would imply an EBITDA of approximately INR43.57 crores. Consolidated PAT stood at INR16.3 crores, with a PAT margin of 1.9%. Consolidated sales volume for the quarter was 66 KT.

Thailand Business Transition and Inventory Impact

The company's Thailand operations, acquired in January 2025, underwent a brand transition to Absolac and Absolan. Inventory was built up during the first half of the year to manage this transition and test plant productivity. However, a significant fall in raw material and finished goods prices over the last 9 months led to inventory losses, impacting consolidated profitability. Management clarified that these were not one-time adjustments but rather a consequence of market pricing dynamics, with over 75% of losses attributed to inventory valuations.

Polystyrene Capacity Expansion and Market Dynamics

Styrenix expanded its polystyrene capacity from 65,000 tons to 100,000 tons, primarily for General Purpose Polystyrene (GPPS). However, overall sales in GPPS have not fully utilized this capacity, partly due to muted demand in the first two quarters of FY26. In contrast, High Impact Polystyrene (HIPS) is running at nearly 100% capacity utilization with a high OEM percentage. Management noted that while GPPS imports are significant, they sometimes consciously avoid the unorganized market due to low pricing.

ABS Demand, Supply, and Expansion Plans

The Indian ABS market remains stable with no significant changes in demand-supply dynamics, despite new capacity additions by competitors. India continues to be a net importer of ABS. Globally, overcapacity in China, Korea, and Taiwan maintains competitive pressure. Styrenix is on track with Phase 1 of its ABS expansion, targeting commissioning in H2 FY27, with an estimated capex of INR350 crores. Phase 2 is planned for the subsequent financial year.

Raw Material Price Volatility and Cost Reduction Initiatives

Management acknowledged the historical volatility of styrene monomer prices but noted they remained fairly stable last year despite a reduction towards year-end. The company has implemented a hybrid power agreement, expected to become effective in February or March 2026. This initiative is anticipated to reduce power costs and contribute to profitability in the coming quarters.

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