Supreme Petrochem Ltd. (SPL) is a prominent Indian company specializing in the production of styrenics. Established as a joint venture between The Supreme Industries Ltd. and the Rajan Raheja Group, SPL has carved out a leadership position in the domestic market. The company is the market leader in both Polystyrene (PS) and Expanded Polystyrene (EPS), commanding a market share that exceeds 50%. This dominance is supported by a state-of-the-art, international-scale styrenics complex located at Amdoshi, Maharashtra, complemented by a second manufacturing facility in Manali, Tamil Nadu. The Amdoshi plant is a comprehensive production hub with a total capacity of 512,000 tonnes per annum (TPA) for a diverse range of polymers, including Polystyrene, Expandable Polystyrene, and the newly commissioned Acrylonitrile Butadiene Styrene (ABS) line. The Manali plant focuses on EPS production, adding another 33,000 TPA to the company's capacity.

SPL's product portfolio is extensive, catering to a wide array of industries. It includes General Purpose Polystyrene (GPPS) and High Impact Polystyrene (HIPS) used in consumer durables and packaging; Expandable Polystyrene (EPS), famously known as "Thermocol," for packaging and insulation; and Extruded Polystyrene (XPS), a high-performance insulation board for energy conservation in buildings, for which SPL operates India's first and only plant. The recent strategic entry into the mass ABS market, with a 70,000 TPA plant, positions the company to capture demand from the automotive, electronics, and appliance sectors. The company also produces specialized Compounds and Masterbatches to enhance polymer properties for custom applications.

Financially, SPL stands on solid ground. It operates as a debt-free entity, funding all its capital expenditure through internal accruals and maintaining an investable surplus of INR 463 crores as of December 2025. This financial prudence is recognized by credit rating agencies, with CRISIL assigning a 'AA-/Positive' long-term rating and IND-Ra an 'AA-/Stable' rating. Operationally, the company demonstrates a strong commitment to sustainability, meeting approximately 50% of its power requirements from renewable sources and achieving zero liquid discharge at both its manufacturing plants. The company's leadership team, chaired by Shri Mahaveer Prasad Taparia, comprises a mix of experienced promoters and independent directors, guiding its strategic initiatives, including the recent acquisition of Xmold Polymers Pvt Ltd to strengthen its presence in the engineering polymer components space.

Official Website: www.supremepetrochem.com

• Quarterly Performance (Q3-FY26 vs Q3-FY25)

• Revenue from Operations: Declined by 10.0% to INR 12,647 million from INR 14,053 million a year ago. This revenue drop occurred despite a 6.7% increase in sales volume, indicating lower product realization prices.

• Operating EBITDA: Fell by 30.3% to INR 692 million, compared to INR 993 million in the prior year's quarter.

• Profit After Tax (PAT): Saw a significant decrease of 57.7%, coming in at INR 302 million versus INR 714 million in Q3-FY25.

• Diluted EPS: Stood at INR 1.60, a sharp decline from INR 3.79 in the corresponding quarter of the previous year.

• Year-to-Date Performance (9M-FY26 vs 9M-FY25)

• Revenue from Operations: Decreased by 16.3% to INR 37,514 million for the nine months ended December 2025.

• Operating EBITDA: Was recorded at INR 2,615 million, a 32.6% drop from INR 3,880 million in 9M-FY25.

• Profit After Tax (PAT): Declined by 43.8% to INR 1,593 million from INR 2,836 million in the same period last year.

• Diluted EPS: For the nine-month period was INR 8.47, down from INR 15.08.

• Balance Sheet and Financial Health

• Debt-Free Status: The company remains debt-free, a significant strength that provides financial flexibility and reduces interest expenses.

• Liquidity: As of December 2025, SPL holds an investable surplus of INR 463 crores, demonstrating strong liquidity.

• Capital Expenditure: All capex is being funded through internal cash accruals, highlighting robust operational cash flow generation.

• Return Ratios (FY25): The company generated a Return on Net Worth (RONW) of 18% and a Return on Capital Employed (ROCE) of 24% in FY25, indicating efficient use of shareholder funds and capital.

The company's recent financial performance shows pressure on profitability and revenues due to lower price realizations, despite stable to growing sales volumes. However, its strong, debt-free balance sheet and healthy liquidity position it well to navigate market volatility and fund future growth.

• Market Leadership: SPL holds a dominant position in the Indian market for Polystyrene and Expanded Polystyrene, with a market share exceeding 50%. This scale provides significant pricing power and operational leverage.

• Integrated Styrenics Complex: The Amdoshi facility is described as India's first truly international-scale, state-of-the-art styrenics complex, allowing for integrated and efficient production of a wide range of polymers.

• Pioneering Product Portfolio: The company operates India's first and only plant for Extruded Polystyrene (XPS) Insulation Foam Board. This product is critical for energy conservation in buildings, aligning the company with green and sustainable construction trends.

• Advanced ABS Technology: The newly launched mass ABS plant utilizes a continuous production process, a first of its kind in India. This technology offers superior product quality, including better consistency, lower base color, higher thermal stability, and lower Volatile Organic Compounds (VOCs), providing a distinct competitive advantage in the market.

• Commitment to Sustainability: SPL meets approximately 50% of its power needs from renewable sources and operates with zero liquid discharge at its plants. This focus not only reduces environmental impact but also enhances its corporate profile and can lead to long-term cost efficiencies.

SPL's uniqueness stems from its dominant market share, advanced manufacturing technology, and a pioneering product portfolio in niche segments like XPS and mass ABS. This is further strengthened by a solid commitment to sustainable and efficient operations.

• Raw Material Price Trends: The price of Styrene monomer, a key raw material, experienced a continuous fall until November 2025.

• Market Stabilization: In December 2025, Styrene monomer prices found stability and showed an upward bias.

• Demand Impact: This price stabilization has had a positive effect on demand, encouraging processors to increase their offtake of styrenic products from SPL.

The outlook for the styrenics industry appears to be improving, as the stabilization and slight uptick in key raw material prices are boosting customer purchasing activity. This trend suggests a potentially stronger demand environment moving forward.

• Volume Growth: Despite a challenging price environment, the company achieved volume growth in the latest quarter. Total sales volume increased by 6.7% in Q3-FY26 to 91,265 MT from 85,537 MT in Q3-FY25.

• Capacity Expansion: The commissioning of the new ABS plant with a capacity of 70,000 TPA in September 2025 is a major growth driver. This marks the company's entry into the high-demand engineering plastics segment.

• Inorganic Growth: The company acquired M/S Xmold Polymers Pvt Ltd, a supplier of engineering polymer components to automotive and appliance manufacturers. The integration of this business is progressing well and will provide forward integration benefits and direct access to key end-user industries.

• Historical Revenue Trajectory: Revenue grew from INR 52,533 million in FY24 to INR 60,234 million in FY25, demonstrating a strong growth track record prior to the recent price-led downturn.

The company's growth is being driven by a combination of organic volume increases, strategic capacity additions in high-value products like ABS, and targeted acquisitions. These initiatives are expanding its product portfolio and market reach into new industrial segments.

• Acrylonitrile Butadiene Styrene (ABS) Market: The new mass ABS plant opens up significant opportunities in various sectors. Key applications include:

• Automotive: Vehicle sheets and components, e-scooters, and automobile batteries.

• Appliances: Small electrical devices, juicers, mixers, grinders, water purifiers, air coolers, and refrigerators.

• Consumer Goods: Toys, helmets, clocks, medical equipment, and bathroom fittings.

• Value-Added Products: The company produces Compounds and Masterbatches, which are ready-to-use grades with specific properties tailored for customers. This creates opportunities to capture higher margins and build deeper relationships with clients in sectors like appliances, automotive, and electrical accessories.

• Sustainable Products (XPS): As a unique manufacturer of XPS in India, SPL is well-positioned to benefit from the growing demand for energy-efficient building materials, driven by climate change concerns and green building regulations. Applications extend to commercial and residential insulation, refrigerated vehicles, and vaccine boxes.

SPL is strategically positioned to capitalize on opportunities in the engineering plastics market with its new ABS capacity and in the sustainable building materials sector with its XPS products. These ventures provide access to high-growth, high-value end-user markets.

• Installed Capacities: The company has the following effective installed capacities:

• Polystyrene (GPPS & HIPS): 300,000 MTPA

• ABS: 70,000 MTPA

• Expandable Polystyrene (EPS): 143,500 MTPA (110,000 in Amdoshi + 33,500 in Manali)

• Masterbatches/Compounds: 72,000 MTPA

• Extruded Polystyrene (XPS): 72,000 M³

• Capital Expenditure Funding: All capital expenditure is being met entirely from internal cash accruals, reflecting the company's strong financial discipline and internal fund generation capabilities.

• New Capex Commissioning: The first line of the mass ABS plant, with a capacity of 70,000 TPA, was commissioned and commenced production at the end of September 2025.

The company has significant installed capacity across its product lines and maintains a prudent capex strategy by funding all expansion internally. The recent commissioning of the ABS plant represents the most significant recent capital project.

• Quarterly Margin Contraction (Q3-FY26 vs Q3-FY25):

• Operating EBITDA Margin: Contracted by 160 basis points (bps) to 5.47% from 7.07%.

• Total EBITDA Margin: Shrank by 208 bps to 6.12% from 8.20%.

• PAT Margin: Declined significantly by 269 bps to 2.37% from 5.08%.

• Year-to-Date Margin Contraction (9M-FY26 vs 9M-FY25):

• Operating EBITDA Margin: Fell by 168 bps to 6.97% from 8.65%.

• Total EBITDA Margin: Decreased by 198 bps to 7.77% from 9.75%.

• PAT Margin: Contracted by 207 bps to 4.25% from 6.32%.

• Historical Context: Margins in FY26 are lower than historical levels. For example, the Operating EBITDA margin was 8.84% in FY25 and 12.45% in FY23, indicating the current period is one of margin pressure, likely due to unfavorable raw material and finished goods price spreads.

The company is experiencing significant margin compression in the current fiscal year compared to both the previous year and its historical performance. This is primarily attributable to market dynamics affecting product price realizations.

• Operational Risk in New Plant: Operations at the newly commissioned ABS plant were suspended in December 2025. This was due to the malfunctioning of a proprietary piece of equipment. The company is currently consulting with its engineering consultant, equipment supplier, and technical collaborator to resolve the issue. This poses a near-term risk to the expected revenue and profit contribution from the new ABS business segment.

• Raw Material Price Volatility: The company's profitability is sensitive to the price of Styrene monomer, its primary raw material. The presentation notes that prices were falling until November 2025 before stabilizing, highlighting the volatility in the input cost environment which directly impacts margins.

The most immediate risk is the operational shutdown of the new ABS plant, which could delay its contribution to growth and profitability. Broader market risk stems from the inherent volatility of raw material prices impacting the company's margins.

• Credit Rating: The company holds strong long-term credit ratings of 'AA-/Positive' from CRISIL and 'AA-/Stable' from IND-Ra. The short-term rating from both agencies is 'A1+', reflecting a very strong capacity for timely payment of short-term debt obligations.

• Acquisition Integration: The integration of the recently acquired M/S Xmold Polymers Pvt Ltd with SPL's existing business is reported to be progressing well. This acquisition enhances SPL's capabilities in serving the automotive and appliance industries.

• Sustainability and Recycling: SPL is actively promoting the "Re-cycling of Post-Consumer Expandable Polystyrene" in association with several NGOs. This initiative addresses environmental concerns related to plastic waste and improves the circular economy credentials of its products.

The company maintains a strong credit profile and is successfully integrating a strategic acquisition while actively pursuing sustainability initiatives. These updates reflect sound operational management and a focus on long-term value creation.