Supreme Petrochem Ltd (SPLPETRO) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Your passcode has been confirmed. Please wait while you are joined to the conference. The conference is now being recorded.
Moderator: Ladies and gentlemen, the conference will begin shortly. Please stay connected. Thank you.
Moderator: Ladies and gentlemen, good day and welcome to Q2 H1 FY '27 Conference Call of Supreme Petrochem Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Poorvangi Jain from Valorem Advisors. Thank you and over to you.
Poorvangi Jain (Valorem Advisors): Thank you. Good evening, everyone. And a very warm welcome to you all. My name is Purvangi Jain, from Valorem Advisors, and we represent the Investor Relations of Supreme Petrochem Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings call for the second quarter and first half of the financial year 2027. Before we begin, let me mention a quick cautionary statement. Some of the statements mentioned in today's earnings call maybe forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties, which would cause actual results to differ from those anticipated. Such statements are based on management's belief, as well as assumptions made by and information currently available to management. Audiences are therefore, cautioned not to place undue reliance on these forward-looking statements in making any investment decisions. The purpose of today's earnings conference call is purely to educate and bring awareness about the company's fundamental business and financial performance for the quarter under review. Now, let me introduce you to the management participating with us in today's earnings call. We have with us Mr. Rakesh Nayyar, Executive Director and CFO; Mr. Dilip Deole, EVP of Finance and Accounts; and Mr. D. N. Mishra, the Company Secretary. Without any further delay, I request Mr. Nayyar to start with his opening remarks. Thank you and over to you, sir.
Rakesh Nayyar (Supreme Petrochem Ltd): Thank you, Purvangi. Good evening, everyone. It's a pleasure to welcome you to the earnings conference call for the second quarter and first half of the financial year 2027. Let me brief you on the financial performance of the quarter, followed by some of the key operational highlights. On a standalone basis, operating income for the company for the second quarter stood at rupees 1,957 crores against rupees 1,100 crores in the corresponding quarter last year. The EBITDA increased to rupees 160 crores with a margin of 8.12%. Profit after tax double to almost doubled to rupees 95 crores. Jump in turnover is partly due to increase in volumes and the balance is all due to increase in the selling prices consequent to increase in the raw material prices. For the first half of the financial year 2027, operating income increased to rupees 3,649 crores with total EBITDA of rupees 508 crores. Profit after tax grew to rupees 331 crore with a PAT margin of 9.08%. On the operational front, during the first half of the financial year 2027, our business navigated a challenging operating environment marked by volatility in styrene prices, disturbed supply chain, elevated ocean freight rates, and subdued export volumes. Additionally, duty-free imports of PS and ABS from ASEAN countries and China intensified competitive pressure on the domestic selling prices during the first 2 months of the second quarter. Our total sales volume for Q2 FY '27 stood at 95,242 MT, registering a 24% year-on-year and 35% quarter-on-quarter increase. However, HY H1 FY '27 sales volume declined 3% year-on-year to 1,66,085 primarily due to lower exports amid supply constraints, longer transit times, and higher freight costs. We continue to diversify our sourcing network for imported raw materials to address supply uncertainties from the Gulf region. On the growth front, our expansion plan remains on track, including the new wide-width insulation board line with a capacity of 1,50,000 cubic meters and the expansion of compounding capacity from 50,000 tons to 80,000 tons per annum. Company continues to remain debt-free with an investable surplus of rupees 886 crores as of September 2026. Our capital expenditure continued to be funded entirely through internal cash accruals, reflecting our strong financial position and disciplined capital allocation. The Board has also approved an interim dividend of 125%, translating to Rs. 2.5 per equity share, reaffirming the company's commitment to rewarding shareholders. With this, I conclude my operating remarks.
Moderator: Thank you. We'll now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question comes from the line of Aditya Khetan with SMIFS Institutional Equities. Please go ahead.
Aditya Khetan (SMIFS Institutional Equities): Thank you, sir, for the opportunity. Sir, just a couple of questions. Sir, first good point during the quarter what we see that volumes have rebounded on quarter-on-quarter basis. Now sir, again, like comparing Q2 with the current month seemed like more of a distort, like current even styrene prices are again moving higher. How you see the coming trajectory moving ahead? Like again volumes could move down from the non-OEM side because so they could not absorb these higher prices. And how you see, sir, like things moving ahead in terms of raw material procurement because you are not able to get supplies from Saudi? How these things will move up, sir? Onto the volume side and onto the raw material procurement side.
Rakesh Nayyar (Supreme Petrochem Ltd): See, currently demand at least after the close of the last quarter to till now, the demand domestic demand is good. Though it is a festival season, that could be also one of the reasons, but the demand so far is good. Now, as far as the styrene prices are concerned, very difficult to predict. Styrene prices are Landed price of styrene monomer today has crossed $1,600 and you are right that going forward, the non-OEM sector may feel the pinch. But if the down if the demand the is strong and they are able to pass it on, the the demand will remain then. So, it's very difficult to predict, but then we expect that the post the American mid-term elections, if the war clouds settle, the things could may perhaps improve from December onwards.
Aditya Khetan (SMIFS Institutional Equities): Got it. And sir, on onto the raw material procurement side?
Rakesh Nayyar (Supreme Petrochem Ltd): Raw material, we are sourcing so as far as the domestic market is concerned, we are meeting the full requirement and we hope that the we should be able to continue to do that.
Aditya Khetan (SMIFS Institutional Equities): Okay, got it, sir. Now, sir, onto now coming to the recent expansions we have outlined of ABS and for polystyrene. Sir, for ABS, December 2025, I believe that's more than some 2 years of timeline from today. So what sort of utilization for phase one we are targeting by then? And secondly, sir, for polystyrene, do we see that sort of a demand growth in India because of that single use plastic ban, then demand is hovering in low mid-single digit. How you see that trajectory moving ahead, sir?
Rakesh Nayyar (Supreme Petrochem Ltd): As far as the polystyrene is concerned, India is India's appliance growth is demand is good. India is also becoming a hub for exports. All the major air conditioning and the appliance guys are setting up new units availing the benefits of PLI. So, the we see that going forward by the and it is not that the day one when we implement the project the demand will be there, but then we have to be ready. The demand will be We'll be able to sell the material. Demand will be there in the next 3 to 4 years. As far as ABS is concerned, as for the phase one, our truncated capacity, we are utilizing almost 85% of that at the moment.
128 more turns of this transcript: log in to Stocksigma to read the full call.