Supreme Petrochem Limited ($500405)

Ladies and gentlemen, good day, and welcome to the Q4 FY '26 Earnings Conference Call of Supreme Petrochem Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Purvangi Jain from Valorem Advisors. Thank you, and over to you, ma'am.

Thank you. Good evening, everyone, and a very warm welcome to you all. My name is Purvangi Jain from Valorem Advisors. We represent the Investor Relations of Supreme Petrochem Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings call for the fourth quarter and financial year ended 2026. Before we begin, let me mention a quick cautionary statement. Some of the statements made in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's belief, as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of today's earnings conference call is purely to educate and bring awareness about the company's fundamental business and financial performance for the quarter under review. Now, let me introduce you to the management participating with us in today's earnings call. We have with us Mr. Rakesh Nayyar, Executive Director and CFO; Mr. Dilip Deole, Chief Executive of Finance and Account; and Mr. D.N. Mishra, Company Secretary. Without any delay, I request Mr. Rakesh Nayyar to start with his opening remarks. Thank you, and over to you, sir.

Thank you, Purvangi. Good evening, everyone. It's a pleasure to welcome you to the earnings conference call for the fourth quarter and the financial year 2026. We'll give you a brief overview of the performance for the quarter ended 31st March. On a stand-alone basis, the revenue from the operations for the fourth quarter stood at INR 1,587 crores, reflecting a growth of 3% year-on-year. The fourth quarter is typically a strong quarter for the company, supported by seasonally higher demand generally. The performance during the quarter was driven by higher volumes and better spreads. Styrene monomer prices remained stable during the quarter, except when it jumps -- witnessed sharp jump in the month of March. The operating EBITDA stood at INR 253 crores, reflecting a growth of 75% year-on-year with operating EBITDA margins improving to 15.9%. The total EBITDA was at INR 264 crores, including the other income. The net profit after tax stood at INR 168 crores with a PAT margin of 10.59% for the quarter. For the financial year 2026, the revenue from operations stood at INR 5,338 crores. This is reflecting a decline of 11% year-on-year, primarily on account of lower average styrene monomer price during the year. Average styrene monomer prices were lower by around 17% compared to the previous year, which resulted in lower realizations despite nominal volume growth. The operating EBITDA stood at INR 515 crores with the total EBITDA being at INR 558 crores with a margin of 10.37% and a net profit margin at INR 327 crores with a margin of 6.13%. On the operational front, the sales volume of manufactured products increased to 100,664 tonnes in quarter 4 2026, as against 95,556 in quarter 4 '25, reflecting a growth of about 5.4%. For the full year, volume stood at 363,203 metric tons as compared to 355,967 metric tons in last year, reflecting a growth of about 2%. Demand from OEM segments remained healthy during the quarter, while non-OEM segments witnessed some softness, and capacity utilization for the year remained healthy at over 80%. The volumes here are -- reported here are net of approximately 14,000 tonnes of the products being transferred and consumed internally for compounding and in the use for XPS insulation board, and hence, are not included in the external sales volumes. On the raw material front, styrene monomer prices remained largely stable until February 2026 within a range of plus/minus 10%. However, prices increased sharply in March 2026, following the West Asia conflict and disruption in supplies through the Strait of Hormuz. Styrene monomer prices rose from around $1,000 prior to the conflict to a peak of approximately $1,650 a tonne and have since moderated to around USD 1,500 per tonne. While the shipments from the Middle East were impacted during the month, company was able to meet the domestic demand through sufficient inventory material in transit and sourcing from alternate geographies. Adequate arrangements have been made to ensure raw material availability going forward in the coming months. And the situation will ease only once the normal shipping through the Strait of Hormuz resumes. With regard to our CapEx projects, manufacturing operations of the mass ABS plant have restarted with modified arrangements and are currently operating at around 65% of the design capacity, pending restoration of the impacted equipment. The product has been well accepted in the market, and we are pleased to inform that the EPS Phase 2 expansion project at our Nagothane complex was successfully commissioned on April 14, 2026, enhancing the EPS capacity from 85,000 tonnes per annum to 115,000 tonnes per annum at Amdoshi complex. On the balance sheet side, the company continues to remain debt-free with an investable surplus of INR 700 crores as at the end of March 2026. All capital expenditure continues to be funded through internal accruals. The Board of Directors has recommended a final dividend of INR 8 per equity share. Along with the interim dividend of INR 2.5 per share declared earlier, the total dividend for the year stands at INR 10.5 per equity share of face value of INR 2 each. With this, I conclude my opening remarks. We are now open to the floor for question-and-answer session. Thank you.

[Operator Instructions] We will take the first question from the line of Aditya Khetan from SMIFS Institutional Equities.

Just a couple of quick questions, and congrats on a good set of numbers also. Sir, my first question is, is it possible to quantify the inventory gains in this quarter or a ballpark figure, if you can give? And consequent to this, sir, suppose if the situation into the West Asia stabilizes, when are we expecting that to come to an end? And subsequently, inventory losses, if you would take, so that would be booked in Q1 or Q2? Any sense on that, sir?

Aditya, it's very difficult -- very, very difficult to estimate the gain -- the inventory gain or inventory loss at the moment because even in the month of April -- in the month of March when the prices of the raw material increased and the shipments which were to be loaded, they were stopped. So some consignments had to be arranged at very high prices. So it's very difficult to estimate that. And going forward also, similarly, when the situation normalizes and our inventories on the high seas or inventories in the stock here, what losses will happen, nobody knows. It's very difficult to assume because last month, the prices were at $1,650 a tonne. And today, they are ruling around $1,500 a tonne. So this is something which is very dynamic. And estimating this is very, very difficult rather next to impossible at the moment.

Okay. Got it, sir. A follow-up onto this question. Sir, suppose if the prices stabilize at these levels, how do you see the demand from the end user industry? Are OEMs still on their way to make contracts at these higher prices, or they are waiting so that prices come down and then they start buying off the finished product? Any idea on that, sir?

See, the OEMs are buying, but then, we are not entering into contracts at the moment because the situation is so fluid that what assumptions to be made now in the current scenario for the raw material pricing and the other expenses to be incurring to procure the raw material -- the shipping costs have gone up. The freight costs are up. So it's very difficult to assume. And so, we -- and the OEMs, we have agreed that we will be doing contracts once the situation normalizes. Secondly, as far as the demand is concerned, the demand from the OEM sector is good. But the non-OEM sector, the demand has taken a big beating at the moment, particularly because, one, the prices are high; two, the labor is also not available. The people have gone back -- the contract laborers and all, they have gone back to their villages at some places. And thirdly, the -- for some processing, you need gas, and gas is not available to the industry or some short supplies. So people are not available. The demand is lower there.

Okay. Got it. Sir, what would be our raw material cycle? Or how much inventory we keep in the pipeline? And secondly, sir, if you can quantify also how much are we procuring styrene monomer from Gulf countries versus China versus U.S.?

I can only suffice to say that as far as domestic market is concerned, we will continue to meet the demand and we are meeting the demand. What geographies we buy -- when we will buy, we will source the material, and we will meet the domestic demand. That is our focus right now. And all our customers are being supplied the raw material -- the material as and when they require it.

Got it. Coming to ABS, as per our latest filing that the capacity design has been modified to make at 65% of the rated capacity earlier. So is this a new normal? Or like -- so this 65% can go to 100% as and when -- so, that technical failure will be resolved?

Once the failure gets resolved because what -- that equipment which failed has been isolated, and the collaborators have provided us some alternate arrangements by which, of the original capacity, we can operate at 65%.

Got it. And sir, this...

Our capacity, which was 70,000, for the time being, it is now reduced to, say, 45,000 to 50,000 tonnes.

Got it, sir. Got it. Sir, into the presentation, we have stated some -- so 14,000 tonnes of March ABS we have produced, and we have used it for the compounding. So this 14,000 tonnes of ABS has been manufactured in the month of March only, right? So 14,000 is a good figure from 20%-odd utilization.

We have not said 14,000 tonnes of ABS. What we have said is polystyrene and ABS.

Okay. So combined...

[ Of ] 14,000 tonnes which has been produced and transferred to our compounding -- further processing and compounding purposes. So, that is -- when we look at our total capacity or the sales, so that is the -- this is something that is -- in our sales numbers, they don't come because they are an interdivisional transfer. When you look at our sales volumes, so that is net of these sales volumes. So they have been produced in our other units and consumed in our compounding divisions.

Got it, sir. Sir, just one last question. Sir, any target volume guidance for FY '27 for base volumes, as well as for ABS separate, if you can give?

I have only one volume to give. And if the normalcy returns by June-end, second quarter onwards, things are normal, then we expect that with the ABS operational, we should be able to do 8% to 10% volume growth this year.

But that seems low. Considering ABS also has now started at 65%, the base business volume of EPS, that number will look slightly lower side.

Because the first quarter, we don't know where we are at the moment. [indiscernible] what I'm saying is subject to the complete normal situation being there from the second quarter onwards. Exports also, the -- you can send exports to Europe today only the Cape of Good Hope. The shipping times have increased. The freight rates have gone up. So it is not the normal business conditions as far as that part of the world is concerned.

Sorry to interrupt in between, Aditya. I'd kindly request you to rejoin the queue again for more questions. We will take the next question from the line of Rahul Agarwal from IKIGAI Asset Manager.

A good set, sir, in a challenging environment, good numbers. Starting with a couple of questions, firstly on pricing and then on sourcing of raw materials. From pricing, sir, for ABS and polystyrene both, how are -- what is the import price right now we're getting quotes for typical from an Indian industry perspective? And when we compare that to what the Supreme sales on March ABS or polystyrene, is that import parity pricing or the rupees appreciated? So is it similar? Is there a large difference there?

For the commodity grades, the base price is always the landed price of imported material. Then you add your little premiums here and there and the cost involved. So for the commodity, the base -- or the price decision is the landed price. But for the value-added grades, then the price differential is entirely different. There are different calculations for that. And as far as the price -- or the imported material coming in, we have not heard of any PS imports coming in or booked recently. So I can't comment what prices the PS now will come if already booked in the month of March or April. ABS, we heard that some imports have been booked at $2,300 and $2,400, and they may arrive now in May or something. So early March, we had heard when the West Asia started that the polystyrene at $1,650 or $1,700 was booked. So they would arrive sometimes in May. But the Indian prices, as far as the commodity grades are concerned, they're generally in line with the landed prices, plus the costs involved there.

So I should assume that polystyrene, whatever the Indian pricing is, is in line with what...

Commodity grades -- for the general grades, yes.

Which basically means that on a quarter-on-quarter basis, we're going to see polystyrene right now selling at what price or almost like INR 170, INR 180 a kg?

Depending upon grade-to-grade, around thereabout.

Got it, sir. Sir, moving ahead on the raw material side, similar question. You mentioned styrene pricing right now spot at $1,500. Is it like whatever inflation we have seen on raw material, and you also mentioned you're not booking new contracts with OEMs, there's going to be more spot sales, I think. Will that -- should I assume it's 100% pass-through and customers are okay buying at that higher price and there is no hit on margins? Is that a fair assumption?

I said earlier to the gentleman, Aditya, that the non-OEM market demand is dented at the moment. It's subdued because of the high prices. So it has impacted the demand. As far as OEMs are concerned, because it's the season for them, so they are buying. But then, it has -- it's at the increased prices only. And it's not that we don't want to enter into a contract with the OEMs. The OEMs have been our old partners, and we have been engaging with the OEMs from beginning, and we supply to practically all the OEMs in the country. It's only that the situation is so fluid in terms of the raw material prices, the freight costs and other attributes which we consider that it is not fair to do a contract at this moment. And maybe once the situation normalizes, then we will enter into our regular contracts with them.

And last question, then I'll get back in the queue. On the raw material sourcing side, when I look at the balance sheet, right, I mean, at INR 600 crores of inventory, it looks pretty stable on a Y-o-Y basis in terms of pace of sales. I don't really think that the company actually stocked more materials. Anyway, the supplies were impacted in fourth quarter. Going forward, you mentioned you will ensure that domestic demand is completely met 100%. Could you just elaborate on the sourcing part? Where are you getting styrene from? And incremental pricing, how should we look at it?

The incremental pricing is -- the incremental pricing will get passed on to the consumers there, only except when the prices really start dropping. Then we may have an inventory loss. It's all a play of market supply and demand today. And as far as the sourcing of material is concerned, we source some from Asia and some from China at the moment.

The next question is from the line of Manish Ostwal from Nirmal Bang Securities.

Good set of numbers. Sir, I have only one question about the Haryana CapEx thing. Can you update what is the status and how -- and what is the CapEx plan for the F '27, sir?

No, as far as Haryana is concerned, we -- because the IOC's styrene monomer plant is delayed, so as far as our polystyrene or EPS projects are concerned, so we are not committing any expense for that at the moment. We [ asked to ] spend some money, but that will be more on the infrastructure and on the other related activities because once we have more clarity on the IOC's SM plant commissioning date, then only we will put in the big monies for the SM -- sorry, PS and EPS. Otherwise, we will be -- we are planning to do some work in regard to the other units there this year.

And the CapEx for the F '27, sir?

For the year, I don't have the separate numbers for Panipat. But for the year, for the company as a whole, we'll be doing around INR 250-odd crores.

The next question is from the line of Nirav Jimudia from Anvil Wealth.

Sir, a few questions. So first is on the consumption of ABS and PS. So like ABS on a monthly basis, we are close to around 25,000, 26,000 tonnes. Some months, it may be higher also. And for PS, we are currently close to around 30,000 tonnes a month. So you mentioned that the OE demand were impacted during the quarter because of the reasons you mentioned on. If you can just help us understand what could be the demand coming from the non-OE sector out of this total consumption of PS and ABS on a monthly basis, some understanding, sir?

I said the non-OEM market was impacted. Particularly in the month of April -- not till March, in the month of April, the non-OEM market demand is impacted. And as far as the division between the OEM and non-OEM is concerned, I would say, for both categories, you can take roughly around 50-50, or 45% for OEM and 55% for non-OEM.

Got it. So this 55% of the demand which was impacted, is it possible to give some quantum in terms of how much it would have reduced? So let's say, on a base of 100, which it was pre-war, how much it would have fallen in the month of April and May?

Too early to estimate that because it's -- now in April only it started. So once the quarter closes, we will have better numbers.

Got it. Sir, you mentioned about the styrene sourcing, like, when we see the global map, let's say, consumption of around 30 million to 33 million tonnes of styrene and -- global consumption, where China is close to around 18 million and we are at around 1.5 million in terms of the global consumption. So when we see the upstreams of styrene, let's say, benzene and ethylene, or let's say, slightly above that to naphtha, even China is importing everything. So how they've been able to manage in terms of their captive consumption of styrene and also have some exportable surplus, which could come to us, A? And B, if you can share your similar thoughts on acrylonitrile? Because then, for ABS, this becomes a very critical raw material. So from where the ACN part is currently coming from?

As far as ethylene and benzene is concerned, China is not fully dependent for this. They have their own internal production. Some part of it, they are dependent on it. But then, they are, in any case, [indiscernible] till now buying the crude from Russia, as well as from Iran, they were able to take their crude oil. So they have some difficulties there. But then, to that extent, their installed capacity was 18 million tonnes, but their own consumption was not 18 million tonnes of styrene monomer. It was less. And so, they are able to -- at least what surplus they have now by ramping up of their capacities, they are able to meet some part of the demand.

And sir, for the ACN, if you can share your thoughts?

Sorry?

Acrylonitrile.

ACN, we have not faced any difficulty till now. We have -- one, we have our own sufficient stock with us, and some supplies were in the pipeline, they have come for us. And going forward also, we are getting it right now. We are getting it from the other geographies.

Got it. Sir, last time, in our conference call, you updated about onboarding some larger customers for Xmold. And you also mentioned that one of the bigger OEM, which was like a third OEM, we had a good discussion, which probably could come on board with us. So if you can help us understand, like, has that customer been onboarded, A? And B? How do we see the Xmold volumes picking up in FY '27? So first, if you can share your thoughts on the utilization part in FY '26? And how are we seeing FY '27 for Xmold?

See, the OEM customers which we said in the last, they are there on the board. We are getting some orders from them. And the third one was an automobile one, which, again, our material is going to their tier 1 -- the supplier for the automobile company. So, that has been -- on a regular basis, it has started. So, as far as customer induction is concerned, that is going on there. Now, volumes are concerned, we -- after the all streamlining and cleaning up there, now we expect this year, we should be doing 50% to 60% more. Like, last year, we did utilization of close to only -- how much is that -- around 50% -- or 40%, 45% of the overall installed capacity. And this year, we should be doing close to 70% of that capacity -- or 65% to 70% of that capacity.

Perfect, sir. Sir, last question from my side. What was the trading sales in quarter 4 of FY '26?

Trading sales?

Yes. Sir, like we reported close to around INR 1,587 crores of turnover this quarter. How much of it was trading out of trading of...

Generally, roughly will be around 18% or so in this quarter.

Sorry, sir, I missed your point.

Around 18%.

Okay. So 18% was the trading?

18% would be there in this quarter. Even for the full year, trading has come down this year, and it will be close to the same level of 18% to 19% only.

[Operator Instructions] We will take the next question from the line of Abhishek Paudwal from DRChoksey.

So most of my questions have been answered. So just one question from my side. So sir, given that the Phase 1 is now running on for the ABS, and what is the current thinking of -- like on Phase 2 expansion? Like, is there any timeline or utilization milestone you are targeting before committing to it? And separately, what's your thought upon competition from ABS imports coming in from Taiwan and Korea? Like, are these imports competitive on price versus domestic products?

The imports have been coming. Imports will continue to come because the domestic capacity is far lower than the actual demand in the country. So the imports is not a concern at the moment. As far as the -- our own capacity utilization is concerned, as I said that we are currently, after the modified arrangement, at 65% of the original rated capacity. And we expect that we should be able to do close to 85%, 90% -- or 80% of that capacity utilization this year. As far as the second line is concerned, we are working on that. And that is irrespective of the fact that what has happened here as far as one equipment -- one piece of equipment is concerned. But then, we are working on the second line.

We will take the next question from the line of Sailesh Raja from B&K Securities.

Yes. Sir, I joined the call late. Apologies if this has already been answered. Sir, with styrene monomer prices currently at elevated levels, USD 1,500, so how are you approaching the procurement decision, especially considering our typical inventory holding of 2 months. So in this environment, would we look to reduce inventory days in anticipation of your price correction or continue procuring at higher prices and rely on pass-through mechanism with customers? So could you please talk about that?

No, we are procuring. Of course, the regular suppliers are not available. Procuring itself is a task today. And we are right now balancing the material available with the demand here, and we are concentrating mainly on meeting at least the domestic demand. And we are aware that because some loss -- inventory loss might come the moment the whole situation normalizes, the prices drop, and that dropping will happen -- it will be a sharp drop. So, as and when it happens, there will be some inventory loss to us. And we are trying to find ways that we are able to contain that as and when it happens, if it happens, then we are able to contain those losses. So all kinds of things we are doing in terms of even passing through the extra costs, sourcing the raw material and matching it with our requirements or the domestic demand. So efforts are on towards that.

Okay. Okay. Sir, given the current raw material supply constraint affecting some polymer players, so do you see scope for faster customer approvals for new grade in the SPC Xmold division for us, considering that such approval -- typically, it will take a year's time. So how do you see that?

No, it's happening. It's happening. We have not faced any difficulty there, but OEMs will take their own time. OEMs -- this is not the case with the OEMs. But the non-OEMs earlier also were not taking very long, and we are not facing such thing at the moment.

Okay. Okay. Sir, in the SPC division, could you elaborate on specific initiatives that we are taking to increase the volumes and also the potential to cross-sell products through Xmold existing automotive customer base? And also, by when do you think that we can reach -- yes, sir.

We are not doing any cross-sell in the sense, we know that all styrene compounding is being done by us. And we continue to do what we were doing. But then, they are since more on the -- the only good thing there is that they were never an appliance compounding company. But now, with Sri City being there, a lot of OEMs are there in Sri City, air conditioning companies are there in Sri City. So they are also focusing on the supplies to air conditioning guys and other OEM guys, and they have been successful in onboarding 2 of the AC manufacturers there.

Okay. Great, sir. Sir, by when we are expected to touch 50,000 volumes in SPC division, SPC and Xmold?

Maybe it will happen this year or next year because ABS compounding is going through that. Now, we have started doing ABS compounding in a little bigger way than what we were doing earlier. So we are...

That was my next question, sir...

Our compounding volume should see a jump this year. So we hope that by -- if not in FY '27, but FY '28, we should be certainly at 50,000.

Okay. Okay. Great, sir. Sir, one last question. In ABS, like, we are targeting around 36,000 tonnes of volume in FY '27. Could you clarify how much additional demand we expect from our internal consumption, sir, particularly from SPC Xmold division? And I also wanted to know the [ GP breakeven ] capacity in ABS.

How much we will supply to our own internal consumption is very difficult to predict because based on what the ABS compounds because we are going to start now the ABS compounds and the acceptability, the new customers coming in, approving the grades, very difficult to say that. But yes, we would be increasing our focus on that. And in any case, the Xmold is not in the ABS compounding at the moment.

We have the next follow-up question from the line of Aditya Khetan from SMIFS Institutional Equities.

Sir, my first question is on the polystyrene. It has been 4 years when we have last debottlenecked the capacity, and we are also nearing about 85% utilization, almost near peak. Any plan, sir, to further debottleneck that capacity?

Yes, we are. Actually, we did not debottleneck 4 years back. We set up a new line altogether 4 years back, 2020 -- 3 years back, we set up a new line. And now, we are evaluating the debottlenking.

And this will be done by, sir, FY '27-'28?

Yes. We are evaluating. I can't give you a time line for that.

Okay. Sir, onto the spreads part, if you can update like what are the current spreads between polystyrene and SM, pre-war and today, and where you see the trajectory going ahead?

You are asking something which is very difficult to answer because the way things are globally, it's -- first is, getting the material is a concern. It's not -- the margins are there. Getting the material itself is a concern at the moment. But then, we -- see, the delta will not sharply increase. The deltas, which were earlier closer to -- say, for GP, were $200, they have moved to closer to $275 or so for GP.

Okay. $270 per tonne for GP, you're saying. Okay.

Yes, $275 thereabout. Some transactions may have happened at -- depending upon -- every day, the prices are changing now. The situation is very fluid. You can't really define what delta. There is no standard thumb rule that this will be the delta now. So the prices are changing, varying every day. Today, the styrene is, say, at $1,500. So the $1,750, $1,800 could be for the landed cost of polystyrene or GP in India, closer to that. So $275 you can assume.

Okay. Sir, the third question is, the inventory gain benefit has been booked in this quarter, or subsequent quarters also, we'll see some benefit?

We don't have some inventory gain as a specific entry here. As and when material comes in, it gets sold. So whatever loss/profit comes in, it gets booked in the business. So there is nothing such that the inventory gain has to be booked or inventory loss is to be booked. It is the transaction happening, material has come in, we have sold it. Whether I made loss or gain, it is there in the balance sheet. It is there in the accounts.

Got it. Got it. Sir, my next question is onto the ABS. So, on the Phase 2 ABS, so sir, that is planned by FY '28. Considering, sir, we are -- the Phase 1 also we are operating at lower capacity. Any idea, sir, Phase 2 will come by FY '28? Are we sticking onto that?

As of now, yes, we are still aiming that only. As far as the capacity is concerned, there's enough demand in India, not that -- okay, we had an unfortunate incident that one of the critical equipment has developed some snag, so -- and that has become something serious because it has to be removed and then repaired, and it's a time-taking process. But then, our collaborators have at least found an alternate arrangement for us, for which we are able to operate at 65% and which we are doing now.

Got it. Sir, just one last question, sir. So the recent government decision to remove the import duty on ABS, are we seeing some good imports of ABS are coming in? And B, because our samples are also now into the market, how much competitive versus imports coming in on pricing on to the quality front?

Right now, as I said, very difficult to compare because whatever material is coming is booked in the month of March, that March prices were ruling at $2,400 for ABS. So if that comes in today, duty or no duty, the landed price of that itself will be INR 230 then. At the current dollar of INR 95, it will be at INR 230 a kg there. So the -- and plus expenses. It is the -- local prices are less than that. So there is no threat from the competition as far as imports are concerned in terms of pricing.

Got it. Sir, directional-wise, if you can just say like for FY '27 -- because so new capacities of ABS and EPS have come in, so some higher cost from that, and consequently, assuming if the war situation stabilizes, so prices are anticipated to come down. Are we -- are you seeing that directionally-wise, EBITDA for FY '27, can we maintain onto that number of FY '26, or it could be slightly lower? Any directional-wise, I'm just asking.

EBITDA-wise, I presume that the -- for the remaining -- see, the first 3 months, I can't predict anything. If situation normalizes, then in the normal circumstances, we should be doing -- because the volumes will be better, so we should be doing better than the last year.

We take the next question from the line of Pritesh Chheda from Lucky Investments.

Sir, just one clarification -- a couple of them. So your pricing which you mentioned about $2,200 of ABS booking, so this is material to arrive in May, or this is the material arrived in March?

I said, the material which was booked in March, that is what we heard. We [ have not got ], but the market information is that material booked in March was at $2,300, even $2,400. So, that arrival may be now in April, maybe get -- may arrive in May. If arrived in April also, it will get sold in May.

Okay. So booked in March was $2,200. And then, you mentioned a number of $1,600. That was booked in...

That is the styrene monomer price I mentioned.

Okay. The other thing is, sir, considering -- so, one of the comments, you mentioned that it's an ongoing business for you, and -- on the inventory question that you answered to. So, is it fair to assume that what we see as the profitability in quarter 4 are last part of the profitability, the ongoing profitability, without any material inventory number flowing into that operating number?

Sorry, I couldn't get you.

Yes. So, to one of the questions you answered about normal nature of the business being we buy inventory and we process it and sell it during the quarter. So, is it fair to assume that the quarter gone by doesn't have any major [indiscernible] on account of inventory flowing into the P&L?

No, it's a process. See, whatever material has come to me, I process, I got increased price maybe, but then I bought also higher price material also. I have supplied even when the market was high. I have met my -- some contractual commitments, which were in the month of March. When prices were skyrocketing, we even met our contractual commitments, which were at the old prices. So it's part of business. There is -- I can't segregate into the pockets that what consignment came and what price it got sold or something.

Okay. The other question is, is it fair to assume, based on your experience, when you have the supply -- raw material supply crunch typically in the system, whereby you have a higher material price flowing in, so materially, the profitability of the business is higher usually versus a scenario which was last year, let's say, where you had a continuously falling styrene price for the first 9 months. So a higher styrene price automatically brings in a slightly better profitability. Is that assumption correct?

There are 2 ways to look at it. The higher price of styrene, if it leads into a better spread as far as polystyrene is concerned, yes, then it is beneficial. But then, it generally doesn't happen because higher styrene monomer prices kills the demand, particularly the sectors which can wait or particularly the people will start going and looking into their pockets and saying, whatever is the old material, let me consume that. The warehouses, the supply chain will rather get emptied there. So the material doesn't get sold there. And you are -- actually you end up holding the stock, which is high-priced stock. And if the prices go down, it finally leads into an inventory loss also. So too much of high price does not guarantee that there will be a better profitability. It kills the demand also.

But in a scenario like this, based on your experience, where shortage of material is throughout the globe, is it a favorable scenario for -- generally for -- so let's say, there were imports happening into the country. I'm assuming supply chain globally are seeing the petchem-related supply shocks. So it's a slightly favorable situation in terms of profitability. Is that correct? Or even that assumption is challenged?

There is no import duty on the imported raw materials or imported polymers also, be polystyrene or ABS or SM. There's 0 duty. SM already was on 0 duty from all the FTA countries, but then there was a duty on PS and ABS. So rather the -- to that extent, they are -- their import cost goes down now. And as far as the global shortage is concerned -- but then again, as I said that the non-OEM sector, the market has already shrunk. April itself, we are seeing now that the market is shrinking as the non-OEM sector is concerned, [ price of which ] went up in the month of March. The prices are coming down. Of all polymers, substantial decrease in prices have happened because people want to push their material and whereas there is no demand coming in.

We will take the next question from the line of Rahul Agarwal from IKIGAI Asset Manager.

Rakesh Ji, one question is for the mass ABS segment. Assuming whenever we ramp up to 70,000 tonnes for the Phase 1, and you said the market is about 50-50 on OEM, non-OEM. What would be a preferred mix for us? Like what would we want to do eventually with the capacity?

We would like to be present in all segments. Like in polystyrene, we are in all the segments. We are with all the OEMs. We are there for all the non-OEM guys also. So we would like to be there. It's not that I will be only looking at -- again, it's only that in the OEM segment, the process to get your grades approved and acceptance process is longer. So, if that happens, we would be in the non-OEM segment. The moment that happens, we will be in OEM sector also.

Right. So it largely should reflect the industry mix, right? It should be like 50-50 overall whenever we reach even, like, 40,000?

Eventually, going forward, once we -- the grades are totally established in the market, we are fully operating, and then that's the scenario we will have.

Got it, sir. And sir, second question was on the operating cash flow. If you look at the cash flow statement, I see a bit of higher working capital investment, largely driven by higher debtors by INR 20 crores as of 31st March. What has changed over here? How should I read the operating cash flow generation?

As the prices -- our selling prices, our purchase price, everything went up in the month of March. So the selling prices being higher, the debtors numbers will go up, plus ABS has come in. So their volume numbers will go up. Inventory is concerned, not only the polystyrene inventory is there, but ABS inventory has also come in. So all that adds to that.

All right. Got it. So basically, going forward, sustainable basis, 30, 35 days of receivable cycle, is that fair to assume on a consol basis?

I know that our net working capital has gone up there because of the increased prices, increased material, which has come in, ABS material has come in. So -- but then, once the things become normal now, they will go back to where we were earlier.

We will take the next question from the line of Nirav Jimudia from Anvil Wealth.

Sir, 2 questions. So first is on the specialized grades of PS. I guess, they were also imported into India. And like because of all this crisis which we are seeing, possibly that specialized grades would be restricted in terms of coming to India. So A, have we seen the premiums for those specialized grades expanded in line with you mentioned for GP? And B, how our volumes have moved for the specialized grades in the month of April for that particular applications?

I don't know which grades you are talking about, Nirav, because...

Like we produce some specialized grades. So, in one of the earlier calls, you mentioned that those grades command premium over the normal grades.

You're talking about some imports happening.

Yes. So like there are some specific grades which are for higher-end refrigerators or washing machines. So...

They are the ones that is the -- if they have been imported, they certainly would be at much higher price than the normal commodity grades. There must be a difference of almost $200 plus there. Looking at import data, the grades which have become for the specialized polystyrene grades, which have been imported, they would be at a price of -- at least an additional price of $200 would be there over the normal grades imported by others.

Got it. So I just wanted to understand like do we have presence in terms of volumes for those specialized grades?

We are there. We are in all kinds of refrigerators and AC grades. Practically, [indiscernible] user -- a maker of refrigerator uses our polystyrene.

Got it. So, to that extent, that benefit would also accrue to us whenever those...

That is what we talk about the value-added grades every time.

Got it. But I just wanted to understand in terms of the expansion of the premium part, which you rightly addressed. The second question is on the EPS part. Like, if we see the demand for India was close to around 150,000 tonnes, so is it also very price-sensitive in terms of -- from the consumer point of view? And also, if you can share your thoughts in terms of how are we seeing the growth in EPS since we have expanded the capacity in FY '25?

EPS is price sensitive. Every product is. But then -- at the lower end, yes. But then, for the packing segment, for the construction segment and cold storages, the demand has been great. It has increased last year. They are the segments from where the demand growth came in. As far as the capacity increase, what we are -- we have to target more of the construction side of it, including the cold storages also, and 3D panels. So we expect going forward, the demand would increase in these segments, and we will be able to supply plus export market. Our grades have been approved in Europe. And during the peak months, we were finding that we are not able to meet the demand there. We can't supply because we have to supply to the local market. So this additional capacity will help us in starting our exports of EPS.

Got it. So safe to assume that at least in line with the volume growth guidance, which you mentioned, similar volume growth could be possible in EPS also like on a consolidated basis for the company as a whole?

We have said that we will -- along with the market growth, so this year, we will also grow this year. But then, all the volumes put together, depending upon the global situation, the war situation, if everything becomes normal by June-end and July sees the normal behavior in the global markets, we should be doing 8% to 10% volume growth this year.

[Operator Instructions] Ladies and gentlemen, as there are no further questions from the participants, we now conclude the question-and-answer session. I now hand the conference back to the management for closing comments. Over to you, sir.

Thank you all for participating in this earnings con call. If you have any further questions or would like to know more about the company, please reach out to our IR managers at Valorem Advisors. Thank you so much. Thank you.

Thank you, members of the management. On behalf of Supreme Petrochem Limited, that concludes this conference. Thank you all for joining us today, and you may now disconnect your lines.