Styrenix Performance Materials Limited (506222) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Styrenix Performance Materials Limited Conference Call. From the management team, we have with us Mr. Rahul Agrawal, Managing Director; Mr. Bhupesh P. Porwal, Chief Financial Officer; and Mr. Chintan Doshi, Manager, Legal and Company Secretary. [Operator Instructions] Please note that this conference is being recorded. Further, on behalf of the management of the company, we would also like to remind the participants that this call has been conducted, subject to and in line with the disclaimer mentioned in the investor's presentation as is available on the stock exchanges. I now hand the conference over to Mr. Bhupesh P. Porwal. Thank you, and over to you sir.

Yes. Thank you very much. Ladies and gentlemen, Namaste, and good afternoon, everyone. I am pleased to welcome you to our quarter 1 financial year 2025 conference call. As we reflect on our performance in fiscal year 2024, I am delighted to announce that we have witnessed a robust demand for our products, marking a significant growth trend. We are on schedule of our debottlenecking and expansion projects announced in previous year. Coming to the financial performance, the highlights are as under. Sales volume has increased by 8.6% compared to quarter 4 of FY '24 and by 21% compared to Q1 FY '24. Revenue increased by 16.7% compared to Q4 FY '24 and 28.5% compared to Q1 FY '24. PBDIT stood at 13.1%, which is better by 0.7% compared to Q4 FY '24, and 3.7% better compared to Q1 FY '23. Profit after tax stood at 8.7%, which is better by 0.5% compared to Q4 FY '24 and better by 2.8% compared to Q1 FY '24. These are all about the highlights of this quarter. And now we may proceed to answer the questions you may have. Thank you very much.

[Operator Instructions] The first question is from the line of Nirav Jimudia from Anvil Research.

Congratulations for a great set. Sir I have 2, 3 questions to ask. So the first is on our ABS. So if you can just help us understand how were the imports of ABS in India in 1 quarter -- first quarter of FY '25 vis-a-vis last year and 4Q of FY '24. If you can just share that trend?

Okay. In terms of imports for this quarter, we don't have that complete data yet because as you know, specifically for the month of June, the import data would be really available to us only by early August. However, as far as imports are concerned, year-on-year, there doesn't seem to be any major shift or any major change over there. We have got some share of that import. Obviously, as our volumes have increased. But overall, the imports are more or less stable if I must say.

Correct. The reason for asking the question was because there were a lot of challenges in terms of container shortages globally and even freight cost was elevated. So I was trying to understand that whether this has helped us to put some additional volumes and gain those volume share in the domestic market? And whether if you can also explain that whether these gross margins which we have reported this quarter includes some element of those higher freight costs, which would have elevated the domestic prices of ABS?

We have seen the impact of ocean freight. So ocean freight impacts us in 2 ways. There is bulk ocean freight, which is impacted on our raw materials, which comes in by way of styrene and acrylonitrile. And there's, of course, ocean freight involving containerized movement of finished goods, which comes into the country. If we look at bulk freight, actually, there was a mismatch towards the end of the last quarter and early part of this quarter where a lot of our materials, in fact, got delayed. And due to that, we, in fact, had to even buy some material in the spot market because we didn't have the availability of raw material coming in at that time. So in fact, that was a bit of a negative, if you will, because we had to buy some material when that material did not come in on time. Overall, not a major impact, but some impact was there. In terms of finished goods coming in, in terms of the shortages of freight vessels, that is happening more so in this quarter as opposed to the last quarter. So there is not a major gap there. I mean if you look at our overall EBITDA margin, that hasn't changed much, right? And even kind of quarter-on-quarter, so that's very similar. It's just that our volumes have increased, and that is purely a function of us being able to produce more and sell more.

Correct. Sir, second question is in terms of our sales volume for ABS. So I just wanted to understand from you, like, do we sell more of those colored ABS and the compounds of ABS as against those white or the black master batches, which are coming to India. And when we generally say that 65% of our sales volume for the ABS are of specialty grade. Does this include those colored ABS and the compounds which we sell to the customers here?

So when we talk about specialty ABS, it does include some of the colored grades, but not all colored grades. There are some colored grades which would be more along the lines of the standard grades of products that we supply in the market. So it's difficult to give that exact breakup here during this call. But there would be, like I said, some component of the natural grades of products or the base grades which should be in the 35% or actually, that number is even lower. And that would also consist of some colored products, but not all colored products. We determine the specialty of the product based on the complexity in manufacturing it as well as the value addition while selling the product.

Correct. And the imports which are coming to India is predominantly those white or the black ABS and not the colored ones which we generally sell, right?

Not really. So the product that comes into the country is a full spectrum. So there are products which come in on the natural side as well as on the specialty side. So the percentage of natural ABS might be a little bit higher coming in from outside the country, but there is also a significant percentage of specialty ABS or colored ABS, if you will, which is sold in the country from outside.

Got it, sir. The last from my side is, if you can just help us out in terms of both for ABS as well as PS, the split of volumes between, let's say, for ABS, predominantly auto and consumer durables, and for PS, let's say, for auto, consumer durables as well as the stationery products?

In PS, there is no sale to automotive.

Yes. Okay. So it's more of consumer durables and stationery ones?

And packaging. So like I mentioned in my previous calls, in ABS, the automotive and household appliances are the larger markets that we cater to followed by electronics then kind of medical devices and toys, stationery, things like that. And in case of polystyrene, it is household appliances again, which is an overlap with our ABS business, and there is some packaging, which is also a significant business and then followed by the other segments that we cater to.

Got it. And just to reconfirm, sir. The time line for the commissioning of our debottlenecking like last time you mentioned, it could be coming in H2 of FY '25. So just to reconfirm that and the volume guidance, what you said earlier, just to reconfirm if you can just share both of them.

So if you look at our overall volumes that we have done in the first quarter, it's close to 48,000 tonnes as opposed to last year, we did about 39,000 or 40,000 tonnes in the first quarter of the year last year. So that's about a 20% increase. This incorporates obviously the debottlenecking, which has happened over the course of last year as well as beginning of this year, this financial year. As we go along, that is on track, and we will have additional volumes coming in, in the second and the third quarters as well. Overall, I think our volume guidance that we had given in the earlier presentation of about 15% to 20% growth over the previous year, that continues to be the case.

Next question is from the line of Rahul Agarwal from IKIGAI Asset Management.

Yes. Congratulations. Well done. Firstly, have you alluded to the sales volume outlook. Just wanted to add a bit here. So obviously, it implies that there is some bit of debottlenecking, which would also happen going into second and third quarter. Is that correct?

That is correct.

Okay. So broadly 15%, 20% is a consolidated guidance, which includes ABS and PS both, right?

That is correct.

Okay. Perfect. Any thoughts or any comments would like to share on the EBITDA spreads we are making on both businesses for fiscal '25 and '26 please?

No, we have not given any guidance as such. We have iterated in the past as well that the company has undertaken projects to increase capacities, both by way of debottlenecking and brownfield expansion. Also, there is cost rationalization measures that the company is undertaking in terms of improving efficiencies. And last but not least, trying to increase the share of value-added products, be it by way of the existing product line or the new products that we have launched in the brand of styroloy and asalac. So combination of all these 3 would help us in achieving better numbers going forward, but we have, as such, no guidance towards that.

Got it. And could you specify a bit more on what kind of new products have been launched at least this year? Whatever you sold in 1Q. Could you highlight a bit more on that, please?

So the volumes currently sold are not very significant. They are still kind of small in the relative terms compared to the rest of the businesses hearing. The products that we have launched right now, we have launched styroloy like I mentioned, and asalac, which are the 2 brand names. Under styroloy, we have done -- we are doing blends like polycarbonate ABS, nylon ABS, ABS PMMA, HIPS, PPO, other products. In case of asalac, it's ASA, which is a kind of weatherable product, which works in applications where high weather resistance is required or weatherability is required or high UV resistance is required. So we've done that as well as blends of ASA, which would be, again, ASA, PMMA and so on and so forth.

Got it. Perfect. One question was on the working capital this quarter. Like how did June end is broadly similar to what March was INR 50 crores, INR 55 crores. Could you highlight what was the operating cash flow for the quarter?

This is not some information that we generally publish. But yes, so.

Okay, no problem. And lastly, just on the CapEx, could you -- guidance for the amount of CapEx to be done for fiscal '25 and '26, please?

So currently, the overall CapEx for the whole year that we estimated would be in the tune of INR 60 crores to INR 70 crores. That number will be fine tuned actually, in the successive next few months because we will have complete clarity once our engineering studies are completed and to what extent we can accelerate the expansion projects and perhaps would also reflect on the CapEx accordingly. So I think by the next investor call, we'll have more information to share.

Next question is from the line of Priyank Chheda from Vallum Capital.

Congratulations for great set of numbers. Sir, my question is on -- could you elaborate what will be the contribution of SAN in this total 48,000 tonnes volume for this quarter? I believe it's also part of when you disclose 48,000 tonnes, it includes SAN plus PS plus ABS correct?

That is correct.

Would you be able to disclose how much of the SAN would be sold in this contribution in this total volumes?

Again, we don't share individual numbers or breakup. We stopped disclosing those exact details in competitive interest, but it is more or less in line with the numbers that we have been doing over the years, and there is not any significant change in that.

Okay. Okay. Perfect. All right. So the incremental volumes have come from the debottlenecking of ABS and PS put together in that ratio, right?

Yes. I mean, like I said, the product mix has not changed drastically across the board, and debottlenecking would have benefited all products.

Okay. Perfect. Coming to adjusted delta spreads. So we have seen slight improvement in ABS prices maybe because of the ocean freight of the finished goods that you alluded to while the starting monomer raw material has also moved in tandem. So do you see some global dislodgement in the delta spread ahead. Any global development, which you would like to highlight, maybe which we should think of increase, which can impact the spreads ahead?

So the global spreads have not changed much in the last kind of 1.5 years since we have taken over management control. I think barring the first quarter of '22-'23 when the spreads were a little bit higher, they kind of normalized post that and they have stayed at a normalized level. Now this is I'm talking from a global perspective, and that continues to be the case today. So there is no major change from that. I think in terms of our own performance, of course, we are benefiting slightly from some operating leverage as our volumes are going up. And with the total sales that we have been able to achieve of different categories of products.

Great. Just last question on the power and fuel cost savings, which you had alluded last quarter plus some reduction in the steam cost. In Q1, at least, we could see that there is a rupee improvement on a per kilo basis. Of course, it has to do with the operating leverage too. Can you elaborate for us what should be the total cost savings that we should think of when it comes to FY '25 in terms of power and fuel and what can be the logistics cost savings that we should see in the forthcoming year.

So in terms of power and fuel, when we discuss about fuel, there is -- there are some projects that are ongoing, where we are looking at more cost-effective and economic sources of generating steam across all our plants. In one of the plants that has already been commissioned. And in the second plant also it's near commissioning stage. The third plant also, we would have that commissioned probably in the next quarter or so. So I think over the course of this year, there will be some savings in fuel of the total savings that we are anticipating at least 30% to 40% of the total savings will come this year and the entire savings will be visible next year. As far as power cost is concerned, we are evaluating different options for which, again, we haven't yet kind of come out with kind of declaration to the public market, which we will give very soon once we have that information on what we intend to do. That power saving will also come in full force next year. And for this year, I think probably towards the end of the year.

Next question is from the line of Akshara Dave from [indiscernible] Commercial.

I have 2 questions for the management. Could you release the previous full year volume data from FY '19 to '22? I understand you were not the management at the time. Could you still have that data?

So earlier, we have been not publishing those data in last few years. So in previous years, we have published the production volume data. So what exactly you want if you can write to [email protected], we'll revert back to you on that.

Okay. Okay. My next question was, you have released the promoters have recently released almost 20% pledged on the holding. Are there any more plans for rest of the pledge to be released as well?

If you check the updates on the stock exchange, we have already informed that the entire pledge has been released. So there is no more pledge existing on any of the promoter shareholding.

Okay. Okay. That's great clarification. And I just wanted to confirm the debottlenecking project was the same project that you've given to McDonald, is that right?

No, that is a brownfield expansion project.

So has that started because this was given in February with the 6 months to start new?

So the -- typically, what happens, ma'am, when we do any project, we have to do a basic and detailed engineering study. McDonald has been awarded the basic engineering work which is due to get completed very soon. And that's when I said we will have a better idea of exactly what the CapEx will be for that project. So that work is still ongoing and due to get completed very, very soon.

Next question is from the line of Ranveer Singh from Yashwi Securities.

Yes, congratulations on a great set of numbers. While I was trying to calculate realization. So basically, for the last quarter volume -- this quarter, you reported you did 44,094 metric tons last quarter. But in the last quarter's investor presentation, it was 44,538, so which would be the right number to take to calculate the realization?

So I think last quarter, we -- up until last quarter, we have been publishing production numbers. So that is the production number. And this time, we have published the sales number. I think last quarter also was a sales number. Up till December, we have been publishing the production, that's the reason.

Yes. Okay. So I had a question. So we observed that -- so you want to observe that realizations have increased 7% quarter-on-quarter. So is this due to the base commodity price increase which happened in March '24, which led to better realization of existing inventory? Or was it due to a better product mix?

Realization will increase 7%.

Sir, realization.

Yes. So it would largely be a function of product mix. As you know, the product mix changes quarter-on-quarter, correct? And that's why I've always guided that one should look at -- one should look at annual kind of data to get a blended idea of what those realizations would be because it's possible that certain rates of products sell in higher volumes in certain quarters vis-a-vis in other quarters. So this is more or less in line with what we would have expected for the kind of products to be sold in this quarter.

Okay. So I have another question. Like we have listed competitor who's producing ABS their realization were a little higher than ours. So ours is lesser mainly because of the product mix because we also produce polystyrene and that is sold at a lower cost. Is my understanding correct?

Yes, broadly, you're correct. So we also sell more SAN, and we also sell more polystyrene and the spreads between ABS, SAN and polystyrene all are different in the industry. And what we normally publish is a blended or overall result, which is different from what the competitors would be publishing.

Next question is from the line of Tej from Niveshaay Investment Advisory.

I have a couple of questions. So taking from the previous participants, you said our realization has increased because of the change in the product mix. But is there a factor of freight cost leading to this increase in realizations? I mean there will be...

So this question has been asked earlier. So I think in the last quarter, there is no real impact of the freight costs. So ultimately, that impact may come. But as of now, we don't see it in the [Technical Difficulty].

Okay. Okay. Got it. Got it. And again, sir, just a confirmation on a previous participant question. So you said that the global spreads and the spreads for you too haven't changed upwards, let's say, on an upward trajectory, it's a normal level only, right? And you expect it to remain same going further, if I'm not wrong?

So this is the current understanding we have. Of course, it can change from time to time. But as of what we, as a management believe to be the case today, and in the near-term future, that indeed seems to be the case.

Next question is from the line of Dattatreya Chitnis, an individual investor.

I'm audible, sir?

Yes, sir, you are.

Just complements and complements, sir. My immense gratitude to you and the Board for the [indiscernible]. The company is highly commendable, the management of the company is meaningfully reliable. And the dividend policy is just incredible. They both deserve kudos and admiration for adopting the most equitable and fair business practice towards all stakeholders, which is very rare in the domain of listed Indian corporates. You can -- I'm sure that you can see only such approach towards stakeholders, among only multinational companies like Nestle, Colgate, Procter & Gamble to name a few. Thank you, sir again, once again, and thank you to convey my thanks to the Board, please.

We'll do, sir. Thank you for your appreciation, sir. I appreciate your kind words.

Next question is from the line of Ashish from Invesco Investment Advisors.

If I recollect the last call, you guided that the EBITDA margin was around 12% was a base and you will build up from there probably, so that's what we could understand. But historically, we've seen that given the nature of your business, the margins have both on gross and EBITDA they've been pretty volatile over the years. So what changes for the company now that those bad days wouldn't come back as in those 12% margin would be the base for the company. I just wanted to understand that, is there anything changes between you and your customers in terms of contractual arrangements or some inventory policy, just your clarifications would help.

So generally, we don't give guidance on EBITDA percentage margins. What we have stated in the past, is that post the 2 years of exceptional results and during global supply chain disruptions. After that, things have normalized. And in a normalized scenario, what we are seeing in the industry today with all factors in play is something that is sustainable, is what we have stated in the past, and we continue to state the same. In terms of margins, generally, the businesses work in terms of spreads, whether it is ABS, polystyrene or SAN. Those spreads have remained sort of consistent. Some improvements we have seen, marginal improvements as we, like I said, augment our capacity and get some operating leverage. We reduce our cost in some areas that we have already mentioned, and we improve our product mix. And so with these 3 factors and 3 levers that we have, we try to do whatever best we can in terms of the margin profile. In terms of EBITDA percentages, it can change because if your raw material prices go up, typically, our finished product prices go up. And there, the EBITDA margins might look a little bit lower. And conversely, if your finished -- raw material prices come down, your finished product prices also come down where your EBITDA margins look higher. So I think in terms of absolute profitability based on the sales volumes that we do would be a good metric for you to understand how the business works and we believe it's sustainable at where we are at with a continued effort to improve it going forward.

So per kg or per tonne metric, is that not going to be as volatile on those metrics versus percentage margin.

Correct.

But sir, there have been years when I can see history where the absolute profitability of the business has gone down substantially. So I don't have the numbers to go on the per tonne basis, how the profitability went, but you may not be the management at that time, but maybe I think INR 10 crores, INR 15 crores was the EBITDA in one of the years, which was pretty deep in terms of negatives. So you don't see such scenarios happening in this business now. So that's what I wanted to understand.

I think you can answer your own question by looking at the overall industry, what has happened. So if you look at specifically Styrenix or whatever name it was in its earlier avatar, you can understand how they were performing vis-a-vis competition. While overall competition seems to have performed better, this company in its earlier avatar has performed little bit poorer, specifically for the years that you have mentioned. Now overall, of course, as the volumes have gone up, all the players in the industry have got some benefit on operating leverage and overall the spreads have improved somewhat. But this is still a very normalized scenario today that we are at. So we don't anticipate any such dips currently because we have all factors such as competitive pressures in terms of global demand supply scenarios, all of these are sort of normalized and have been for the last several quarters, and we don't anticipate that to change.

Yes. So the point to take is some bit of management issues were also responsible for those years where the profitability was higher.

I won't comment directly on that. I hope you can appreciate it.

Got it. So sir, one more clarification I wanted to understand because you said in the opening questions that the global spreads have remained more or less there. But is there any change on the India side of it if the domestic business sees a better scenario for spread somewhere because of the freight issues that are there?

Could be. But again, my comment will be speculative in nature, which I shall refrain from making at this stage.

Next question is from the line of Akash Khaitan from [indiscernible].

Yes. My question is on the realizations. So I wanted to understand basically realization per kg has jumped from around INR 126 to INR 145. So what triggered this? And are these the kind of realizations we can expect going forward?

I mean raw material prices have gone up and so have the finished product prices. So overall, prices have moved in tandem with raw material prices. If you look at, again, the overall profitability per tonne, whatever, there are some slight improvements over there. And that is, like I said, on account of operating leverage and some cost savings that we have achieved. But of course, they are not of the same order of magnitude that you have mentioned because just looking at a price is not going to be able to tell you the whole story.

Next question is from the line of Nilesh Saha from Julius Baer.

Are you able to hear me?

Yes. We're able to hear you, sir.

Okay. Great. Just 1 question from my end. So in your earlier calls, you have made a comment that something like 65% to 70% of the ABS that is sold is sort of specialty grade, which we understand is a customized grade that you are supplying to a particular OEM could be an auto or appliances or OEM to meet certain features on strength, durability. Could you comment on the nature of those contracts, right from a realization and pricing point of view. The reason I'm asking this is because I'm trying to better appreciate why the spreads are a bit volatile because -- and I'm not -- and I'm sort of struggling to understand that at least for this piece, your realized -- what would be the dependence of your realizations for this piece on global ABS prices? That's my question.

Okay. Since we have -- Mr. Saha, since we have taken over management control in November '22, and having more kind of control over the business, say, in the quarter post that. In terms of spreads that you see, there is an incremental improvement on an annualized basis. But the volatility that you're alluding to is probably more to do with pricing rather than with spreads. There has not been a lot of volatility since situation has normalized as far as the global markets are concerned. So we don't see a lot of volatility here. When we talk about specialized ABS or specialized or customized products that we give to customers, it's very difficult for me here to tell you how those spreads work, because there are thousands, if not more SKUs, which are made as per the need of that customer and depending on the complexity of the product grade that needs to be made, the spreads can vary quite significantly. In terms of ABS, we sell ABS based on, obviously, base properties, which is impact strength. It is chemical resistance, it is tensile, ductility, processability. But then, of course, we can make high heat ABS. We can make electroplating ABS, printable ABS, super high impact ABS, high-gloss ABS, and antistatic ABS, UV-resistant ABS and many such properties can be imparted to the product based on how you customize it, how you produce it. And even within that, there are hundreds of colors, which can be produced and hundreds of additional properties, which can be imported to the ABS. Should we go into detail and explain to you how each of these grades how the realization.

Just generally asking the nature of the contract. So is it based on the sort of pricing of ABS plus a markup? Or is there a linkage of the global ABS spread or ABS price that has observed. I was more sort of I wanted a qualitative color on the nature of those contracts, not anything specific to do with the various products you must be selling?

Yes. So it would be in line with kind of a cost-plus basis, right? So depending on what my input costs are on raw materials, and those raw materials would be determined by publication pricing, which is ABNS, as you correctly pointed out. Beyond that, whatever the difficulty or complexities would be added on in terms of margin.

Right, right. And then these are -- have some sort of a reset frequency, right?

So these are decided on a monthly basis because the pricing on raw materials changes on a monthly basis, and so would our contracts reflect that.

Next question is from the line of Aditya Khetan from SMIFS.

My first question is on to the ABS part. Sir, is it possible to quantify so what would be the utilizing -- so what would be the utilization level of ABS we have operated in this quarter and in FY '24 and similarly in polystyrene.

Sorry to interrupt you. We have lost your audio. Can you hear us?

Mr. Khetan?

Sorry to interrupt we lost you, can you repeat the answer?

Yes, I'm asking is Mr. Khetan referring to capacity utilization when he talks about utilization?

Yes, sir. Capacity utilization.

So capacity utilization is near full utilization every single quarter. Like I mentioned, when we do debottlenecking, we realize there is a scope for additional volumes, which can be produced. Now, debottlenecking is a very broad casual term that we are using. We also do process improvements. We also do technology improvements along with that. And that helps us realize higher volumes and that's a continuous exercise. But we are, at any point of time, operating on full capacity at that particular point in time and have been for the last 5 quarters.

Got it. Sir, on to the ABS, sir, when we look at the data for the past 2 years and today, we have witnessed that the ABS spreads have gone up by almost 30% to 40%. So now you're saying that the global spreads are almost streamline as compared to last year, but the data suggests like currently, we are trading at around 30% to 40% premium in terms of spreads, and that is also reflected in your numbers. So just wanted to know this improvement in spread is only because of the shipping cost or the ocean freight or there are some structural changes, like which is happening either it could be because of lower imports from Korea or any other factor like which you can allude to?

We can take this question offline because I think your data and our data is a little bit different. If you see, basically, when you compare spreads, the only data which is normally available at a global level, is your general injection molding ABS grade. If I track the spreads on general injection molding ABS grade, and I have that entire data for the last 2 years, there is absolutely no change. So when you say it's increased by 30% to 40%, we can take this question offline and we'll be very happy to answer it for you.

Got it, sir. Sir, on to the ABS, sir, you had mentioned so we are also funding the capacity. Any sort of a figure we have outlined so for 85,000 tonnes taking this capacity to around 2 lakh tonne, what would be the CapEx figure?

So like I mentioned, in this year, we are targeting about 105,000 tonnes or 100,000 to 105,000 tonnes of ABS. We are in line to do that. To go from 105,000 to 210,000, and of course, polystyrene also to go from 100,000 to 150,000 tonnes. We have outlined an overall CapEx guidance of about INR 650 crores. We'll have detail on that very shortly. So hopefully, in the next few months, where we will know exactly what will be the cost and how much would be the spend over the next few years and in which quarter. So that detailing has yet to be done, but that was broadly the number which we had given earlier. And that remains to be the case until we get more details from our engineering studies.

Got it. And sir, one last question. Sir, on to the other expenses, the benefit, which we have got in this quarter, so this we can assume it for the full fiscal FY '25?

Again, there will be a function of product mix. There will also be a function of specific seasonality in certain quarters. There could be factors which can help us. But you see there is an overall base spread which doesn't change too much or is not very volatile. There could be certain temporary or momentary changes which may happen. Like I said, we have not given any guidance, but you can consider whatever is happening currently as the normalized sustainable scenario.

Next question is from the line of Dhara from ValueQuest Investment.

My first question is on getting more clarity on the debottlenecking exercise that we're doing. So I just want to understand this will open up how much capacity for us? Is it like 60,000 tonnes? The reason why I'm asking this question is because we did face capacity constraints before our doubling of capacity comes in FY '28? If you can help me clarify this?

So prior to us taking over management, the capacity of ABS or the maximum production or sales of ABS based on own produced products was close to around 65,000 tonnes, which last year, we did about 90,000 tonnes of ABS. This year, we are targeting between 100,000 to 105,000 tonnes of ABS. This is all by virtue of debottlenecking. So going from 105,000 to 210,000 is the larger kind of brownfield expansion, which will help us double the capacity. How fast it can happen, whether it can happen in a modular fashion and what will be the exact date of commissioning, we'll give more information on that. But initially, we had given a broad guidance of '28, but we believe that it can be done sooner, and we'll have exact information in the next few months on that.

So sir, when you mentioned solar does it mean it will give us enough space on the entire capacity each from online at one time, can it be?

I think we'll have to wait for a month or two to share that information. Once we have it, we'll share that with you.

Okay. And what would be the total capacity of ABS, SAN, polystyrene and blend all the capacity put together, what is the total capacity that we have today?

So right now, it's about -- going to be about 200,000 tonnes for the full year. And for -- I think we have given that guidance as well, where we mentioned 200,000 tonnes for this year. And the increases also we have demonstrated or kind of indicated in the last a few investor presentations ago. So you can refer to that, and that number would still remain valid as far as our current planning is concerned.

Next question is from the line of Pratik Singhania from SageOne Investments.

Yes. With respect to adding to Dhara's question, with respect to the existing capacity in last quarter's presentation, for ABS, it was mentioned that the existing capacity is 85,000 tonnes. And for PS, it is 66,000 tonnes. But because of your internal efficiency and like process measures, you said in FY '24, you did a total production of 90,000 tonnes, right? So sir, similarly, for end of Q1 FY '25 because of your own process improvement, what is the monthly or quarterly production capacity, not the stated one, but the capability of the company to manufacture like tonnage of ABS and polystyrene per quarter, how it would be?

So whatever we have produced in this quarter is the maximum that we can produce, okay? In the next few quarters, there is debottlenecking which is happening on ABS, which will help us produce more. I think on the overall annualized basis, we are still on track to reach the number that we have mentioned, which is about 100,000 to 105,000 tonnes.

Right. So basically, in terms of number, if I can assign a number because I'm asking this historical number. So at the end of this, Q1 FY '25, what would be the capability in terms of it would be similar 22,500 tonnes per month per quarter for ABS?

Well, if we are talking about producing 105,000 tonnes, that number would be a little bit higher, right? It would be closer to 25,000 tonnes or 26,000 tonnes. And that is what, in fact, is the current capacity.

Okay. So we have already debottlenecked the ABS capacity to 105,000?

No, we have not. We have done it, but we are very close to it, balance part of it will be done in the next quarter, and then we'll reach that exact number.

Okay. And sir, currently, what is our HRG capacity? How much we can produce per month?

So HRG capacity is 24,000 tonnes, and that is currently the case. Again, there will be some debottlenecking over there in the next quarter, which will help us produce more HRG.

10%, 15% debottlenecking can be achieved over here?

Yes.

Okay. And sir, when you'll be saying that you'll be adding like the capacity for ABS debottlenecking. So we will not be sacrificing on our SAN tonnage, right? It will be incremental volume that will be added or we have to...

No, that is correct. SAN, we have, in fact, additional capacity already in place. So we will not have to sacrifice any SAN tonnage.

Okay. And sir, similarly, if you can tell me about polystyrene, like 66,000 tonnes. Is it still at 66,000 tonnes per annum? Or you have done some kind of debottlenecking for it to have some midpoint of, say, 80,000, 85,000 as of now?

So SAN is currently at that capacity, what we have mentioned. In the next quarter, that debottlenecking exercise should be completed. And on an annualized basis, of course, it would be 100,000 tonnes. But for this year, because of some time lost during the debottlenecking exercise itself, the overall capacity of Dahej, like you mentioned, would be -- polystyrene would be around 75,000 to 80,000 tonnes.

Okay. Okay. Great. And sir best wishes because like increasing 8,000 tonnes incrementally Y-o-Y at an incremental fixed cost of just INR 5 crores net is commendable. All the best, sir.

Next question is from the line of Krunal Shah from Enam Investments.

Congratulation on a good set of numbers. I have 1 question on Asalac. Can you just help me understand the raw material mix that Asalac -- required to make Asalac? And also on Asalac, have you already started selling it in the market or are we still the customer approval phase?

So Krunal, Asalac is composed of a different kind of a rubber, which is used, which will basically, like you have ABS composed of HRG and SAN for that matter. Similarly, for Asalac also, you would have ASA rubber, which would be its own kind of rubber specialized rubber along with SAN and NSAN. So it would be similar in terms of percentages that would be used. The rubber part, again, is something which we have developed, and we would be partly using our own partly buying from outside as well. The SAN and NSAN pieces, of course, are pieces that we already have in-house available to use. So that's ongoing. In terms of customer qualifications and validations, we have received some validations and some commercial orders have started. But these are still quite small, and we believe that the real benefit potentially will come toward the last quarter of this year.

Next question is from the line of Hemant, individual investor.

Congratulations on a very good set of numbers. Sir, my question is pertaining to the stake sale by the promoter. If the prospects of the company are good and the future is very, very bright and promising, then why is there stake sale by the promoter.

So a few things, Hemant.

Sorry to interrupt you. Hemant, could you mute your line.

Sir, your voice is cracking.

Hemant, can you mute your line from your side please?

Yes. Hemant, in terms of the functioning of the company or prospects of the company, they remain very much in line with whatever we have been speaking about and what we believe. So that does not change. The stake sale is frankly a decision taken at the promoter level, which is considering the promoters own options to retire certain debt, which was taken for the acquisition of the shares itself. And there was, of course, a pledge also created as a result of that debt. We believe that in the interest of the company, in the interest of the shareholders as well as the interest of the promoters, it made sense to dilute some equity for us to alleviate that part. And that is a decision that the promoter group has taken. Of course, it will -- does not really have any bearing per se on operations of Styrenix for which we are talking about here. But to answer your question, I hope that, that addresses your concerns.

So sir, you mean to say it's some data was taken by the promoter in acquiring the company. And the stake sale was basically done to retire that debt?

That is correct.

Next question is from the line of Tushar Vasuja from Yogya Capital.

I have a few questions, and I'm a bit new to your company, so I'm sorry if there are bit rudimentary in nature. But my first question is, can you give a revenue distribution based on the end industry that you serve?

So Tushar, we produced 2 lines of products broadly, ABS and polystyrene. In ABS, we cater to the automotive industry. We cater to household appliances or large appliances, electronics, medical devices, small appliances, stationery, toys. And generally, the revenue mix is about 40% in automotive, similar percentages in household appliances. And then the other appliance -- the other industries are, of course, smaller in nature. Polystyrene, on the other hand, again, it's about 40-odd percent in household appliances, similar percentage in packaging and then the other industries is where we have the rest of the sales.

Okay, sir. And another thing that you mentioned a lot about debottlenecking. And you also mentioned a CapEx of INR 60 crores to INR 70 crores or somewhere about that for this year. So does that include the cost for the debottlenecking? Or is it completely different expansion?

That's included.

That's included?

Yes.

Okay. And I'm asking a bit of a broad question because like how have things changed for the company since the management has changed?

So we believe that the company has very bright future in terms of growth prospects. I think that is one kind of management philosophy, which has got reinstilled in the company and its management team. And in line with that philosophy, a lot of changes have happened in terms of product efficiency, in terms of projects that we are doing, in terms of customer relationships. So the entire kind of organizational structure, organizational part of the organization -- of the company has changed and is more geared towards ensuring that we grow.

Next question is from the line of Pritesh Chheda from Lucky Investment Managers.

I have 2 questions, and I can't compliment your answer. One on the freight side -- can you hear me?

Yes. Go ahead, Pritesh.

Yes. So on the freight side and the price increase, so what I haven't checked with the traders over there that is where the prices of ABS have gone up on the freight. And you were in short to mention the RM-related price increase or the bulk spread price increases and price increase, which has slowed in, but you didn't comment on the freight-related finished good price increases, which have flowed in, in the month of June or the latter of month of June. Should we see that going in now in these quarters which are going to come by? That's first question. And my second question on the power and fuel cost, whatever projects you're implementing. Can you quantify the absolute EBITDA range benefit on account of this power and fuel cost? And should it be -- should one assume over and above this INR 19 a kg EBITDA, which flowed in the quarter 1 of this year.

So the overall ocean freight changes, which have happened in the Far East, which has an impact on finished goods and the market in India is not reflected in the June quarter. There could be some impact of it in the current quarter. Of course, it would be speculative of me to comment on that, but this is data you can independently verify as well. With regards to your second question, which is on utility costs, which is power and fuel. I think there are a lot of projects, like I mentioned on fuel, where we are commissioning alternate fuel source utility operations, which are going to happen in this month and then consequently after 2, 3 months as well. So all of this is going to lead to an EBITDA improvement. Again, we haven't given a guidance on exactly what that percentage will be, and it will be premature for me to that right now, because we have to understand exactly what that will entail at full capacity utilization. But you will see the benefit of that incrementally, I think, from next quarter and in the full year for next year, for sure.

Are these benefits material? Are there a couple of percent type margin improvement? Can you give that kind of indication?

So just to give you an idea, when we produce fuel using natural gas, our cost is around INR 6, INR 6.5 a kg. When we use certain alternate fuels the cost per kg can come down to as low as INR 2.5 to INR 3. So if you calculate and correlate that to overall fuel cost, you can see that it is fairly material.

Okay. Perfect. So basically, freight-related benefit has not flowed in, in quarter 1 is what you're concluding. They can come incrementally in quarter 2 onwards, and then you have the power and fuel cost saving to be [indiscernible] for the quarter 1 number for that [indiscernible].

Right.

Ladies and gentlemen, we will take that as the last question. I'll now hand the conference over to Mr. Chintan Doshi for closing comments.

Okay. Thank you, investors communities for joining the call and showing interest in the company, and we look forward to answer you in the next investor call, which will be announced at suitable time in future. Thank you.

Thank you very much. On behalf of Styrenix Performance Materials Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.