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

Ladies and gentlemen, good day, and welcome to Styrenix Performance Materials Limited Conference Call. We have with us today from the management of Styrenix Performance Materials Limited, 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 is being conducted subject to and in line with the disclaimer mentioned in the investor 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, Mr. Porwal.

Yes. Thank you very much. Ladies and gentlemen, Namaste, everyone. I am pleased to welcome you to our Q4 and the period ended March 2025 conference call. As we reflect on our performance in fiscal year 2025, I'm delighted to announce that we have witnessed a robust demand for our products in FY '25, marking a significant growth trend. As informed earlier in the last quarter, we have executed the management handover for INEOS Styrolution of the Thailand company on January 17, 2025. Some details of its assets, infrastructure and business has been mentioned by MD in his message in the investor presentation. Coming to the financial performance, Q4 FY '25 highlights. Sales volume for Q4 was 48.3 kt versus 47.5 kt in Q3 FY '25. That is it has increased by 1.7% and by 9.5% compared to Q4 FY '24, which was 44.1 kt. Revenue stood at INR 702 crores in FY '25 Q4 versus INR 691 crores in Q3 FY '25, that is increased by 1.6% and increased by 17.2% compared to Q4 FY '24, which was INR 599 crores. PBDIT stood at INR 83 crores, that is 11.8% versus 75.4% -- versus INR 75.4 crores, sorry, that is 10.9% in Q3 FY '25 and INR 74.2 crores, 12.4% in Q4 FY '24. PAT stood at INR 53.1 crores in Q4, that is 7.6% versus INR 47.7 crores, 6.3% in Q3 FY '25. Coming to the yearly highlights. Sales volume has been increased by 12.8%. It has gone from 164 kt to 186 kt. Revenue has grown by 23.5% in comparison to the previous year, going from INR 2,222 crores to INR 2,744 crores. PBDIT stood at INR 356 crores, that is 12.9%, which is better by 0.7% compared to FY 2024. And PAT stood at INR 232 crores, that is 8.5%, which is better by 0.8% compared to FY 2024. The company has acquired Styrenix Performance Thailand Limited in January 2025 only, and the consolidated results for the year ended March 31, 2025 includes financial results of subsidiaries. But in the previous year, 2023-'24, the company did not have any subsidiaries. Therefore, only stand-alone financial statements were prepared. Accordingly, the previous years and quarter's figures, both years and the quarter's figures both presented in the consolidated financial statements are derived from the stand-alone financial statements of the company and are not comparable with the current year's consolidated figures. Coming to the consolidated highlights for the quarter 4, sales volume was overall 65 kt, revenue stood at INR 940 crores, PBDIT stood at INR 90 crores, that is 9.57%. PAT stood at INR 56.2 crores in that is 6%. Consolidated -- for the yearly highlights, sales volume was 203 kt, revenue was INR 2,982 crores. PBDIT stood at INR 362 crores, that is 12.2% and PAT was INR 235.1 crores in Q4, that is 7.9%. This is all about financial highlights for the quarter and year ended March 2025. 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 Dhaval Shah from Girik Capital.

Great set of numbers. Am I audible?

Yes.

Yes.

Yes. Okay. So first small clarification from the presentation. In our Chairman's comments, we mentioned about starting 50,000 tonne production earlier and it's mentioned 2026 itself. So does it mean FY '26 or calendar year '26?

So early...

Calendar year '26.

Calendar year. Okay. Understood. Okay. So that capacity will be reflected like in FY '27 then? Sorry, '27, you will be starting the capacity?

Yes. I mean, it will be towards the end of financial year, you can say '26-'27. So you'll get some benefit of it potentially in the next year -- next financial year and the full benefit would come in the following financial year.

Understood. So our installed capacity as of today would be 205,000 tonnes, ABS and polystyrene combined?

The combined capacity now that we would have for this year because in the last year, we did a lot of debottlenecking activities, and we did some improvements like process. The total capacity, which we believe for this financial year would be to the tune of around 2 lakh tonnes roughly.

Yes.

2 lakh tonnes, which will be available for the entire current year?

Correct.

Yes.

Okay. Okay. So now we did around 185,000...

We do believe that we would be carrying out some additional work, which could further augment some of that capacity in the middle of this year. But exactly how much that will enhance the overall capacity too is a little difficult to ascertain at this stage.

Got it. So if the demand is there, can we grow our volumes by 10% over FY '25 volumes, which is around 185,000?

We believe so.

We'll have that much capacity to add another 10% on 185,000.

Yes, we could.

Okay. Okay. And so, 2 lakh tonnes for the current year capacity and then you'll have some debottlenecking. And then for '26, how the capacity -- like how much capacity will we have? Like how much growth can be supported?

I think if you refer back to our old investor presentation, we have outlined some numbers where we have mentioned exactly how the capacities will grow. Now, some of these are estimates based on the activities which come in the middle of the year and are hard to predict exactly what that would happen. However, that forms a kind of a rough guideline, and that would be true in this instance as well. So essentially, even this year, we do believe that our effective capacity will be actually a little bit more than 200,000 tonnes. Whether it will be 205,000 or 210,000 will depend on exactly when we are able to complete these activities in the middle of this year. Again, like I mentioned, we do intend to add additional ABS capacity in the middle of the next financial year. So that will add some capacity for us in the next financial year as well. So I think we have given some guidelines on where those capacities will end up. And I think it will be in line with that.

Got it. Sir, now coming to the P&L, if you look at the other expenses, now our other expenses for the quarter is around INR 80 crores, and we've done 48,000 tonnes vis-a-vis compared to the last quarter, December quarter, it was INR 68 crores of other expenses and for a 47,500 tonnes volume. So this additional increase in other expenses around INR 12 crores would be attributed to what?

So we have had some extraordinary expenses, one-off expenses in the quarter. Essentially, we have had roughly INR 11 crores, which can be attributed to certain name change expenses in GIDCs. We have 2 GIDC plants. We have a plant in Dahej and we have a plant in Nandesari, which is under GIDC. And when we took over management control of the company, this required us to change the name registered with GIDC from INEOS Styrolution to Styrenix. And this process sometimes takes longer. So this process, while it's not been completed fully, it is coming to an end. And we have taken a provisional expense to the tune of INR 11 crores for that, which obviously is not a recurring expense. It's a onetime expense, which has been provisioned for in the last quarter. Also, there has been an additional expense, kind of an extraordinary expense, which is related to acquisition of the Thailand company, which is to the tune of INR 4 crores. So about -- you can say INR 15-odd crores is an additional expense we have had in the last quarter, which is a one-off expense and would not be a recurring cost to the company.

Okay. Okay. So, let's say that, this change of name is costing INR 11 crores? Or does it have some like...

There is a -- so the Industrial Development Corporations in Gujarat, I'm assuming this will be similar for the rest of India as well. Whenever there is a name of -- name change, basically, the property is transferred to the new company's name. At that time, there is a fee which has to be paid to the Industrial Development Corporation. And essentially, this is a provision towards that.

Understood. Got it. And sir, last question...

And also payment to the revenue authorities also is there. So both GIDC, as well as stamp duty to revenue authorities.

Correct. I mean, basically, towards that line item, multiple expenses would be there.

Will be there. Okay. And sir, how would be your outlook on spreads for the current quarter, Q1 '26? Does the current trend continue...

Dhaval, we don't give forward-looking statements. But all I can say is that, we are in line to meet our targets for this year as well. And to the extent capacity is available for us, we should be able to have the kind of revenue and growth, which we predict.

The next question is from the line of [ Kalash Jain ] from AlfAccurate Advisors.

Congratulations on good set of numbers. So sir, firstly, I just wanted to know like gain your view on the path for the Thailand acquisition and how the business will go on. So any light you can give on the Thailand business?

Do you have any other questions, Kalash, because I'd like to capture all your questions before answering?

Yes, yes, sir. And my other question would be related to our sales volume in the Thailand plant. So just 2 questions from my end.

Okay. So as far as the Thailand business is concerned, I think Mr. Porwal already mentioned, we acquired -- we took management control on the 17th of January. So effectively, in the last quarter, we had a little less than 2.5 months of kind of running the plant and the business. In that time, in terms of overall volumes, it is to the tune of around 17,000, 18,000 tonnes of sales, which we have done from there, which is in line with what the plant has been doing. Overall, we do have a target to increase that capacity utilization in the plant over there. And we have taken a lot of steps such as expanding our sales infrastructure and strengthening the efforts in terms of validations with newer products as well from that plant. We do believe there is a great opportunity for us to do that. One of the positives that we have observed in the last quarter is that, we have run the plant at a very high capacity utilization just to be sure that the plant and the asset can support higher volumes when they would be required from that facility with the demand coming in. So that has been effectively achieved, and that's a very positive sign. We do believe that with all the efforts that we are putting in, we would have, within a reasonable period of time, be able to achieve very high capacity utilizations with the Thailand business. So we don't give, again, like I said, forward-looking statements. That business in terms of the customer profile, the profile is similar, but the markets are a little bit different. So we will need a little bit of time before we can be exactly sure of when those capacities will be completely filled up.

Okay. Got it, sir. And sir, just on the realization at the Thailand plant, so like what would the path look like? And how much time can we take our realization on the upward scale? And secondly, on the cost perspective, so for the Thailand part, how would the cost work? And will it be in the higher range only? Or how does it work? So just wanted your view.

So it's a process, Kalash. Like I mentioned, it's a business we have recently taken over. For the price that has been paid for the asset, we do believe there is significant value that will be generated from that asset for the organization as a whole. There are multiple technologies, which will also be of great benefit to the organization in Thailand, as well as in India. Market access is another key aspect, as well as the capacities. So based on these 3 kind of strengths that the Thailand entity offers, we do believe from a medium- to long-term perspective, there will be significant value which will be generated in terms of product mix, in terms of markets. And obviously, eventually, all of this will affect the realizations in the business as well. Exactly what those realizations are going to be is very difficult to assess at this stage. Obviously, as you can tell from the result, we have had a positive quarter in the first quarter of the acquisition itself. I think that's a positive sign and a good sign. There is a lot of work to be done in terms of improving our cost position in Thailand, in terms of capacity utilization, which would obviously also improve our cost position in terms of capacity kind of product mix improvements. So all of these things we are working on. And we do believe that after a reasonable period of time, we'll be able to give -- shed more light on that. But it's -- I think it's a positive sign for all the investors to note very clearly that there is a positive contribution from Thailand from the first quarter itself.

Okay. And sir, just lastly, volumes that we did in our Thailand subsidiary, so it was totally for the domestic only or like you had exported some of the volumes?

Are you talking about Thailand business for domestic as in within Thailand?

Yes, yes within Thailand. So all these volumes were within Thailand or you had exported something?

So there is -- so we do export a fair bit of product from our Thailand facility. We do have exports -- significant exports into China, into Japan, into Korea, Vietnam, Indonesia and Thailand as well. We don't give the exact breakup right now. This is a little bit sensitive information with regards to our competition in that region right now. But I can say that more than 50% is definitely exported out of Thailand.

[Operator Instructions] We'll take the next question from the line of Radha from B&K Securities.

Sir, my first question was in an AC refrigerator or a washing machine, I wanted to understand what is the total content in terms of kg separately for PS and ABS? And also, over the years, how has this content evolved?

Okay. Radha, do you have any other questions?

Yes, sir, 2 more. Okay, I'll say this.

Please ask all your questions.

Okay, sir. The second question is, I wanted to understand customer preferences for conventional ABS when compared to mass ABS, especially in terms of cost and surface finish? So could you please explain in detail why a customer might choose conventional ABS over mass ABS? And the third question is that, what are the advantages of having SAN as a backward integration, especially in context of our ABS production? So does our business model with in-house SAN integration offer a competitive edge over players focused solely on mass ABS? Those are the 3 questions, sir.

Okay. So with regards to refrigerators, washing machines and ACs, the content of ABS and PS does vary quite a bit. If I look at the ABS consumption in, say, refrigerators and washing machines, it can be anywhere from 700 grams to as high as about 2.5 to 3 kilograms, depending on the size and the model, which we are talking about. In air conditioner, it can be either HIPS or ABS, broadly speaking, which is the body. And that is again around 1.5 kilograms per unit on the PS side. The polystyrene in refrigerators and washing machine, again, is to the tune of, again, around between 500 grams or 600 grams to about 3 kilos, again, depending on the size and model of the machine or the appliance. The evolution of usage of both these polymers, it has grown over the years. In fact, as more premiumization of consumer appliances has taken place, there is a certain aesthetics which are important. And in those aesthetics, ABS plays a key role. As you know, it's a paintable product, also offers electroplating and offers a very high level of gloss and you can do pre-colors in many, many different shades, including metallic stuff. So there are a lot of advantages of these polymers. And as the models have become bigger, the consumptions have increased and obviously, as they have become more premium, we have seen higher volumes grow in that per unit as well. With regards to your question on conventional versus mass ABS, in India, currently, there is no mass ABS, which is being sold. We are not exactly sure what would be the preference. So I'm not the -- I'm not sure exactly how this will play out in the marketplace. What we understand is of conventional ABS. We do understand that as far as conventional ABS is concerned, we have a lot of versatility in being able to provide several different grades and customization, which can be carried out because it's not a continuous process, obviously. So like you asked the question about SAN as backward integration. So this question is also interlinked because when we produce SAN and we produce rubber, we have a great deal of flexibility on what kind of grade we can produce for the end customer. So even for different applications within, say, ABS, there are different SAN grades which can be developed because SAN, for instance, provides the chemical resistance for the final product. It also provides high tensile. So when these properties are required in a higher -- at a higher level, then we can kind of adjust the dosage or the percentage of SAN accordingly. There are, of course -- it's a very -- there are a lot of other nuances of how the SAN would be used and what properties it would add. And I have just captured very few of these in explaining this kind of advantage to you. But definitely, SAN, I would not say it's purely a backward integration. SAN actually is an end-use product as well. We do sell in the market close to 18,000 tonnes. In fact, we do a lot of sale of SAN from our Thailand facility as well. And we have some very special SAN also in our Thailand facility, which eventually will help us in developing more applications in India as well, not to mention other markets. So yes, so there is a lot of advantages of having SAN. And we'll see as far as conventional and mass ABS goes, how the market develops. But currently, 100% of the market is the emulsion ABS route, which we produce currently.

Sir, you mentioned that in AC, HIPS and ABS is used. So since ABS is costlier per kg compared to HIPS, please explain a bit on how is both used in the same product? And second follow-up is, in terms of cost of production, will in-house SAN have lower cost of production for manufacturing ABS when compared to mass ABS?

So as far as ACs are concerned, typically, it is a philosophy of the manufacturer because both the products are used essentially for the body of the outdoor -- for the indoor unit. And for the outdoor unit, for instance, there is also some glass filled ABS, which is used. Polystyrene is not used in that instance. So -- but it's only for the indoor unit where you could use HIPS or ABS. So some of it has to do with exactly how the positioning of the manufacturer is of the particular model that they offer and the properties they wish to have within their unit, and that would determine. In terms of pricing, while the pricing generally of ABS would be a little bit higher, we have seen the reverse happening as well between HIPS and ABS at times for that specific application. But many times, companies when they are doing a specific kind of usage, they stick to that for a longer period and do not change based on the volatility associated with it very quickly.

And in terms of cost of production, sir, for the in-house and...

So in mass ABS, I'm not an expert on mass ABS since we don't produce. But from what I understand in mass ABS, there is no SAN which is per se produced. It's an in situ process of producing mass ABS directly. So there is no real comparison between SAN and mass ABS.

The next question is from the line of Nirali Gopani from Unique PMS.

Rahul, just 1 clarification. So if I take out the exceptional nature of other expense, the Thailand EBITDA margin is also quite reasonable of around 8% to 9%. So is that understanding correct? And if yes, how were we doing this in the first quarter?

No, no. Bhupesh, can you shed more light on exactly the EBITDA margin of the Thailand because the exceptional items are for the Indian business, not for the Thailand business, but Bhupesh can give more idea on exactly what the EBITDA is on the Thailand business.

Yes, sure. So the extraordinary expenses, which was explained by MD in one of the earlier questions are for the stand-alone basis for the India company. For the Thailand company, the EBITDA has been 4.1% for this quarter. And I think from last -- since we have taken over, this is the first quarter, and it is a positive one. And earlier, all quarters have been in red, in fact. So this is a very, very big change and welcome change in this quarter for the Thailand business.

Okay. Perfect. Perfect. And also, in our earlier presentation when we indicated the growth plans, so we have some debottlenecking plan for FY '26, which you also mentioned in your remarks for FY '27 also. And then we are preponing our ABS capacity. So what gives you the confidence of utilizing this capacity as and when it comes up because we have now additional capacity from Thailand also? So some qualitative comments will be very helpful.

So the Thailand entity, essentially, the product made in the Thailand entity, there is no significant sale to India from the Thailand entity. The market is a little bit different in terms of the products that we produce from Thailand. In India, of course, whatever we have done over the last few years, we have been able to effectively produce more and sell whatever we have been able to produce. So that is kind of a basis of confidence for us. We started at a kind of an average run rate of about 120,000 tonnes of all products put together. We were doing about 60,000 tonnes of ABS when we took over management control from the previous management in '22. From there, we are at about 186,000 last year, which is growth of more than 50%. And we've been able to do that without compromising in terms of realization. So we do believe that the market will grow over the period of kind of expansions, which we are planning and additional capacities which are coming in the market. And the market overall would still be able to support essentially all the capacities which would be available from local producers.

Right. And this kind of -- I know you never comment on the EBITDA margin, but what we have done in Q4 is quite reasonable. So you feel that this number can be sustained for the full year FY '26?

So notwithstanding any significant events, and there are quite a few which go on in the world, I think our strategy has held us well, which is, we are augmenting capacities, we are expanding product lines, and we are reducing costs. And this is an ongoing effort in every quarter, every day. And that has helped us ensure that regardless of whatever geopolitical shocks are going on, we are still able to maintain or do better than what we have done previously. So we still maintain the same line of working.

The next question is from the line of Meet Parikh from Mihir Shah & Company (sic) [ Ameet Parikh from Mihir Asia and Company ].

So congratulations on a good set of numbers, sir. I had a basic accounting question. So if we look at our cash flow statement, so the working capital has gone up significantly, like inventory has gone up by -- there has been a year-on-year change of almost INR 385 crores or something like that. And the trader -- the debtors has also gone up quite a bit. So could you shed some light on that?

Yes. So, Ameet, you are talking about the stand-alone part?

Sir, stand-alone or consolidated, like stand-alone INR 385 crores, I'm not sure of the consolidated number, but there also there has been quite a big swing. So could you shed some light on that?

Yes, sure. So basically, you must be hearing about debottlenecking exercises and all other things going on. And for future expansion plans also, there has to be a lot of things going into the plant. So we have built up some inventories in-between so that the business doesn't suffer for that. So yes, the inventories have increased, which will be normalized again in a year or so once our -- all projects are getting completed. And at Thailand also, if you see the inventory has increased a bit. As MD had mentioned in a question just a few minutes back to understand the assets and to see those -- how those assets are working, we have run the full throttle there. And so, that's the reason -- these are the 2 reasons at both the places, 2 different reasons for increasing the inventory. Thailand, it will be normalized soon maybe, yes. So that increase will not carry forward going on. It will be as per the business norms and our practice only.

Right, sir. And sir, my second question is related to CapEx. So the number that we had guided for this year. So are we on track for that?

So CapEx is as per plan only. So as mentioned, we will be commissioning 50 kt -- we'll getting ABS capacity of 50 kt in mid of the calendar year or later part of the calendar year of 2026. And it is -- the plan is as it is. So no change in the plan. We are -- in fact, this has been preponed. In fact, we had planned earlier later. But as informed during the last quarter, it has been preponed and we are sticking to that, and we are sure we'll be able to achieve those dates.

The next question is from the line of Rahul Agarwal from IKIGAI Assets.

Just a few clarifications on whatever has been discussed so far. So fiscal '26 and '27, volume growth essentially depends on 2 things. One is, of course, the debottlenecking, which will happen during the year, which is why we are carrying higher inventory in India. And second is, we could see some ramp-up on Thailand as well. Just wanted to understand, I mean, at 185,000 tonnes of sales already, which is almost like 90% utilization, is -- are these plants -- can these plants run at 100% in India? That's one question. And second is, is it very different between ABS, PS or both plants can run at 100% in India? And if we include debottlenecking, of course, we can try and increase some bit of sales volume this year. So about 10%, 15% is something which we should build or not is I wanted to clarify. That's the first question.

Rahul, if you can ask your other questions as well, I'll appreciate it.

Sure. Second was on CapEx. As Mr. Bhupesh explained, it's sticking to earlier plan. I just wanted to know the HIPS expansion. I think about 45,000 tonnes is something which we're supposed to add. Will that be preponed as well? Like will that happen in fiscal '26? And if yes, then just wanted to know the overall CapEx budget for the company for fiscal '26 overall and '27, if that is possible? And third question was on working capital. Can we optimize from here on? I understand the current inventory is high, I completely understand that. But just wanted to know when I look at some of other listed peers, especially on polystyrene, I think they operate like very, very efficiently on something like a 0 to 10-day kind of working capital cycle, and I look at numbers in more detail, I see a lesser receivable cycle. So maybe is the difference more so because of polystyrene versus ABS that ABS is more of a credit market versus polystyrene? And in your view, how much can we optimize, let's say, if we take a 2-year view on India business? Do you foresee that our working capital cycle can actually come down to like those kind of levels? Those are my 3 questions.

Okay. Rahul, first of all, thanks for joining on -- to all of you, all the participants joining on a Sunday. I appreciate everyone taking -- making sure it's convenient. I know it's not the ideal day, but respect the time that you are giving to the organization. First, your question, whether the plants can be run at 100%? So the plant is running at 100% now. It has been running for the last at least 2 years that we have taken over management control. It's just that definition of what that 100% has kept on changing based on what we are doing each year, right? I have explained this in the past that as we carry out some process improvement or debottlenecking, we realize that certain additional capacity is possible. And that is the same philosophy with which we are planning to run in this financial year as well. And we do believe there is some additional capacities which are possible. So we did complete some exercises, say, towards the end of December last year when we did the debottlenecking of our Nandesari plant for rubber, which we went up to 27 kt, which allows us to make more ABS and that will translate to a higher volume this year on PS as well. We did some work towards the middle of last year, which, again, the full capacity would be available this year. So those additional capacities would be available to us as well. To that extent, we will have higher volumes. So this is going to happen, and we are continuously working in that direction. So we do believe that, again, going back to the earlier forecast of what volumes we had mentioned, we should be very similar to that. On HIPS, in my note, I have mentioned that we have got an indication from our engineering firm that they would be ready with some kind of an estimation very, very soon. So once that estimation is ready, and this is obviously a certain estimate, which is within 10% to 20% of the overall CapEx, while we had made an estimation earlier, we would have a more accurate data based on their engineering study. So once that is out, we will be able to tell you exactly how much that will cost and when that will come online as well. That would be the result of that engineering study. With regards to working capital cycles, if you again look at the last 2 years, there has been a lot of changes. And this is primarily because, as Bhupesh already detailed that when we do debottlenecking, we essentially look at certain parts of the process, which need to account for a larger inventory for us, and we do that, and that increase our inventories. On working capital, as far as receivables and debtors are concerned, there is not a major difference between, again, PS and ABS. In fact, I would say, it is very similar in terms of the credit terms. So there is no major gap over there. I think overall working capital is getting affected largely based on the inventories rather than anything else. And we do believe that till we are growing, while some of our peers already are running -- already have very high capacities, we are running at very much higher capacity utilizations overall, which is why we are in the situation we are at. As far as ABS is concerned, I think we are a little bit better than our peers. So I think on polystyrene as well, we would be doing fine, if not for having to account for higher buildup of inventory to manage sales. So I think that's what it is, and this is what we are trying to maintain.

Just a few follow-ups. So firstly, would you hazard a guess for volume growth for fiscal '26 for India business?

Like I said, I think we should be able to do growth in line with what capacities would be available to us. And this would be higher than 200,000 tonnes. Whether it's 205,000 or 210,000, I'm not exactly sure right now. But to that order of that magnitude, we would have growth in volumes in India.

And HIPS will definitely not be part of fiscal '26, right? I mean, even if we finalize that estimations very soon, the production will start sometime in fiscal '27. Is that correct?

Yes, yes. Yes. I mean, let's see what the engineering studies say. I don't want to put the horse before the cart. So let the study come in and I'm in a better position to answer that question.

Got it. Any overall CapEx number for the business overall fiscal '26, what budgets are you working with?

Bhupesh, do we have a number on that right now?

So maybe we can -- the things are getting finalized soon, maybe in the next fortnight or so, 15 days or so, and then we can definitely let you know exact numbers, which we'll be spending in this year and what numbers we'll be spending in next year. Only one additional point here for working capital, maybe slightly more -- one reason is more there. So what I had mentioned, we had some vessels coming together because of some problem at one of the vendors, and then a couple of -- 2 to 3 vessels that came in the last week of March. Otherwise, it would have been staggered and then we would have not got so much of inventory and screwed up my working capital at the March end. So maybe an operational issue, which all companies have. So this is also one of the things in the working capital there.

Got it. One last question on Thailand business, and I'll just get back in the queue. On the volume outlook for '26, you said we can run -- we run -- ran this capacity rather at full throttle this quarter, which yields about 18,000 tonnes. If I analyze that, we are almost closer to 75% utilization. So just wanted to know like in terms of volumes, what could be like the peak performance of this entity? And I understand it will take a long time. But just wanted to know that as of now, Thailand can actually sell ABS, SAN and rubber all 3 to third parties. That is one. And the second question on that was, assuming that it's only ABS and some merchant sales for SAN and some sales of rubber, is this entity like a INR 300 crores EBITDA full year at peak utilization whenever it happens? That's the 2 questions.

Where did the INR 300 crores number come from, Rahul? I'm curious.

I am just multiplying INR 30 a kg into 100,000 tonnes of sales volume.

No, that's -- I would not look at it like that. See, it's a different market. It's a different product profile. So it works a little bit differently in Thailand than what we are used to seeing in India. It's still going to take a little bit of time for us to come to numbers which we can assess. So we have not given really any guidance on that, and we are not very comfortable giving any guidance today. In terms of overall capacity, the nameplate capacity of the plant has been mentioned in a presentation earlier, which has been shared with the larger community. It's to the tune of 120,000 tonnes roughly, which includes rubber, SAN, compounding, everything. And that number, we do believe, based on what we have done in the first quarter is achievable from a production [ standpoint ]. In terms of sales, when and how that will happen is something which we will require a little bit of time to assess and answer. On EBITDAs, again, will be a function of how the capacity utilization takes place in terms of specific product mixes, all the markets that we cater to. So multiple questions need to be answered before we can answer such a question. It's only been 2.5 months, right?

Sure. I appreciate that. But we do sell SAN and rubber outside, right, to third parties apart from ABS. Is that correct?

That is correct.

[Operator Instructions] The next question is from the line of Ranvir Singh from ESB Securities.

So if I see the India realization, they stand at around INR 145,000 approximately and the Thailand business is around INR 135,000 per tonne realization.

For Mr. Singh, your voice, yes, your audio is not clear, sir. Because there is a lot of background noise from your end.

Is it better?

Please try asking your question once more.

I'm asking that the India realization stand at approximately INR 145,000 a tonne. Whereas the Thailand realizations are like INR 135,000 a tonne. What is the reason for the delta?

Ranvir, the product profile in Thailand is completely different from the one in India. There is no comparison. So one can't say we are not essentially a lot of the products we are selling are in terms of formulation, in terms of application are also very, very different. So we -- there is no clear way to tell you exactly why they are different. It's just that, I guess, the market for the products in Thailand, again, is different from the market that we have in India, the type of grades that we supply and the type of product mix that we have. So that would effectively make the realization what it is. So there is no clear-cut way to compare the 2. So -- but in terms of cost position, again, there is a lot of difference between what we do in India and Thailand. So there is no way to compare. It's not apples-to-apples.

The next question is from the line of [ Pratik Kothari ] from C. R. Kothari And Sons. Ma'am, I'm sorry to interrupt you. Please introduce yourself and proceed with your question please.

My name is [ Vidisha ]. I'm speaking from C. R. Kothari [ group and Sons ]. So my first question is, I want to understand what is the realization that in India? And compared to Thailand, will those realizations be higher, in line or same? And my second question is, could you just correct me again, the Thailand capacity is 185 kilotonnes and the existing India capacity is 200 kilotonnes. So the new capacity will be close to 385 kilotonnes in FY '26. So is that understanding correct?

No, the capacity in Thailand is not 185 kt. I already just mentioned on the previous call as well, and it's there in the earlier presentation. The capacity in Thailand is closer to 125,000 tonnes, including all products. India capacities are closer to 200,000 tonnes. You are correct in that sense. So the overall capacity comes to about 320,000 at this moment, which is, of course, a changing number based on what we are able to achieve in terms of certain improvements during the course of this year. As far as realizations in India and Thailand are concerned, realizations in India are fairly stable or growing year-on-year. These numbers are easy to calculate based on the results which are in front of you. With regards to Thailand, of course, it's early days, and there is a lot of work which is going on to understanding where these realizations are coming from, how -- what we can do in terms of improving it. And there are multiple factors at play, such as capacity utilization, product mix and in terms of cost position as well in Thailand, there is a lot of work to be done. So realizations in Thailand is something which we do believe there is a lot of room to improve on. To what extent and where they can be is hard to determine at this stage.

All right. And also the 17,000 tonnes that is produced for Thailand, so that is produced for you said 1.5 months approximately. So based on that annualized, it can produce closer to 136 kilotonnes in a year. But if I look previously...

17 kt is for the quarter, ma'am. It's from the 1st of January until the 31st of March. And those are -- that is not a production number, that is a sales number, okay? Production number is different from the sales number.

The next question, which is a follow-up question is from the line of Dhaval Shah from Girik Capital.

Yes. Sir, just 1 question. Any positive or negative surprises post the acquisition of our Thailand unit in terms of cost of operations, in terms of receivables, in terms of contract with suppliers? Anything you would like to highlight?

So, Dhaval, thanks for the question. So we did a fairly extensive due diligence process when we had taken over the Thailand entity in terms of a financial tax, environmental legal due diligence. We do believe that whatever the findings in that due diligence are in line with what we are seeing at the asset. Generally speaking, we are quite encouraged by the quality of the asset and the team. Some of the questions which had to be answered for us was essentially ensuring that the plant can actually indeed produce at a much higher level, which it has not been previously. So we tested that theory by doing it ourselves when we took over management, hence also resulted in some higher inventories. So that's something which is, I guess, it's not a surprise, but I would say it's a positive confirmation of what we wanted to see. As far as the business is concerned and what we are doing over there, it's very much in line. Of course, there are geopolitical events which are taking place globally and those do have an impact on our business as well. This has got nothing to do with the entity in isolation. But since there are global factors at play here, that does have an impact on how we conduct our business as well.

The next follow-up question is from the line of Radha from B&K Securities.

Sir, over the past 2 to 3 years, China has added significant styrene monomer capacity. So do you believe that this would lead to a wave of downstream capacity additions in products like PS and ABS, which could potentially increase imports into India? And subsequently, how competitive are we with the Chinese players? And in that context, what are the export opportunities for us?

Yes. A very good question. So essentially, China's capacities have not only increased in styrene monomer, they have increased in the entire petrochemical chain across all polymers, across all monomers and basic chemicals. So already in terms of capacities of ABS, SAN, polystyrene, not to mention other polymers, China is already producing far more than it actually needs even today. And that's not the case this year, and that's not been just the case last year, but even before that. So this has always exerted pressure in the subcontinent, including India as well from manufacturers, not only in China, but also in Korea, Taiwan, Thailand and the entire region. So this is something that we have -- we are accustomed to. We do understand how this works. The idea is, for us as an organization, how we are able to differentiate in our products and in terms of our offering to our customers, what we can do. So I think we have been able to demonstrate that in India effectively. I do believe in Thailand as well, we have some very differentiated technologies, which hold us in good stead today and will continue to do so going forward. So it's -- for a lot of the products we produce in Thailand, we are one of very few producers. And in some grades, for instance, there is no producer for that in [ China also ]. So to that extent, all the capacities which have come up in that region are not directly comparable to what we do currently as a company.

But sir, if there is an overcapacity in China in polystyrene, then why is there not much dumping happening from China to India in polystyrene?

Well, dumping does happen from time to time, opportunistically, but it's not a continuous phenomena from China. I think in terms of, again, preferences by customers in India, there is a preference for domestic manufacturers. There are multiple reasons for that. And we are still able to, so to speak, keep our relationships and business intact in India in spite of competition.

Sir, in other chemical companies, we have seen that whenever there is an overcapacity, then the dumping happens at such a price that the margins of Indian players could get affected unless there is an antidumping duty. So, given that there is an overcapacity and there is still margin stability in Indian players. So I'm able to understand why isn't it happening -- why isn't this phenomenon happening in polystyrene?

So we believe that even within polystyrene, we have certain products which are not very, very easy and straightforward to replace. So in the markets in packaging, as well as in appliances, there is a fair amount of validation, fair amount of customization, which also takes place, probably not as much as ABS, but still to some degree, it is there. And the preference, again, as long as we are competitive, this does not work like a pure basic commodity where switching from one product to the other is as easy or as straightforward.

How much capacity China would have in ABS, sir?

Ms. Radha, I'm sorry to interrupt you, ma'am. There are others who are waiting. I would request you to kindly rejoin the queue. Ladies and gentlemen, we will take the last question for today, which is from the line of Rahul Agarwal from IKIGAI Assets.

Just one thing on the presentation for the company for the fourth quarter results. The industry outlook slide talks about a very weak kind of start to first quarter. Just wanted to understand, should we read more into it? Or is it more like a quarterly volatility wherein it settled down over the year? That's one. Second was, on this entire discussion of styrene monomer imports from China. Just wanted to know, is there a BIS risk here because I'm not really sure if the BIS standards are applicable for -- the QCO norms are applicable for styrene. And the third was, any comments on the pricing of ABS and polystyrene in India right now? If you could just help me understand the outlook for the full year? That's all.

Yes. So with regards to our comments on quarter volatility, you're right, Rahul, it is in line with typically what we see every year. And there is no major change in that and not too much to read into it, I guess. At the beginning of the quarter, yes, there was a little bit of, you can say, kind of a muted sentiment, more muted sentiment on account of tariffs in the U.S. But I think this has settled down. We don't see a major change, I guess, from previous years. So it's similar. With regards to BIS for styrene, we do believe it is to be implemented this year. It's not happened yet. So styrene monomer itself from China, anyways doesn't come. It's not very competitive in India historically as well. I think in terms of downstream from styrene, yes, there is a BIS on ABS. So to that extent, ABS coming in from China, it becomes a little bit trickier. For polystyrene, currently, there is no BIS, but there is -- that we do believe would come up in time as well. So that would limit some amount of polystyrene from China. Well, currently, while there is not, we still don't see dumping to the extent which people fear. So there is no issue there. In terms of pricing for ABS and PS, currently, we believe it is stable. There is no major change from what we have seen in previous years since we are managing the company, and it is largely expected to remain in line with that.

Thank you, sir. As that was the last question for today, I would now like to hand the conference over to Mr. Chintan Doshi for closing comments. Thank you, and over to you, sir.

Thank you. Thank you, everyone, for joining us today on earnings call. We appreciate your interest and time in the company. We look forward to answer you in the next meeting, which will be announced at suitable time in future. Thank you.

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

Thank you.

Thank you very much.

Thank you, sir. Have a great day.