Supreme Petroch. Q1 FY27 Earnings Call — Analysis (NSE: SPLPETRO)

EBITDA surges 188% YoY to ₹331 Cr on margin windfall from West Asia supply shock; volumes decline 24.5% as non-OEM demand halts and exports dry up.

4 Aug 2026 · Analysis by Alpha Inflection

The take

Q1FY27 Revenue ₹1,693 Cr ( +22% YoY ) . New guidance — Q1FY28 eps board line of 150,000 m³ an… 150,000 m³; 80,000 TPA . New story: Aggressive multi-year capacity expansion .

Results

Revenue ₹1,693 Cr +22% YoY; EBITDA ₹331 Cr +188% YoY; EBITDA margin 19.53%; PAT ₹236 Cr.

Financial highlights

Guidance

Capex of ~₹900 Cr for new PS, EPS, ABS capacities; full capacity asset turnover targeted at 2x; no near-term volume/margin guidance due to fluid geopolitical situation.

What management committed to

• [EPS board line] of 150,000 cubic meters wide-width and [compounding capacity] expansion from 50,000 to 80,000 TPA will be commissioned by June 2027. — 150,000 m³; 80,000 TPA, Q1FY28
• [New 80,000 TPA polystyrene production line at Amdoshi] will be completed by December 2028, increasing total polystyrene capacity from 300,000 to 380,000 TPA. — 80,000 TPA, Q3FY29
• Total capex for all announced capacity expansions (PS line, EPS board, compounding, ABS Line 2, XPS) will be ~₹900 Cr and all capacities will be on board by March 2029. — ~₹900 Cr, Q4FY29
• [Asset turnover on all new expansions] will be twice on full capacity basis. — twice (2x), on full capacity basis
• [80,000 TPA compounding capacity] will be fully utilised within 2 years after its commissioning in June 2027. — fully utilise, Q1FY30
• [EPS exports to European markets] will resume and grow once the shipping situation normalizes. — once the situation normalizes
• [Expanded ABS compounding capacity] will be fully sold out in the next three to four years. — fully sell out, FY31
• [Credit policy in compounding business] will remain strictly disciplined; company will not supply material where there is no credit discipline.

Key themes

West Asia supply shock drives margin aberration

How the narrative shifted

• West Asia supply shock margin aberration: Geopolitical tensions disrupted styrene supply from Gulf, spiking raw material costs and global product deltas, delivering an unsustainable margin windfall.
• Volume decline non-OEM plus exports freeze: Non-OEM demand collapsed by 50% due to high prices and gas shortages; exports nearly zero as shipping from alternate sources became prohibitive.
• Aggressive multi-year capacity expansion: Management committed to major capex across PS, EPS, ABS, and XPS, betting on long-term domestic OEM-led demand and eventual export recovery, funded internally.
• Value-added compounds and credit discipline: Compounds, particularly ABS, are growth engines with better margins; company refuses to compromise on credit terms, targeting quality over volume.
• Near-term opacity and guidance vacuum: Management declines any volume or margin guidance for FY27, citing unprecedented fluidity in raw material supply, shipping, and geopolitical risks.
• Import policy distortion and competitive dynamics: Temporary import duty waiver caused a modest import uptick but overall import volumes remain in line with historical trend; domestic industry share not severely impacted.

Operational commentary

• EPS Phase 2 capacity expansion completed; new wide-width EPS board line (150,000 m³) and compounding expansion (50k to 80k TPA) to be commissioned by June 2027.
• Board approved new 80,000 TPA polystyrene line at Amdoshi, completion Dec 2028, raising total PS capacity from 300k to 380k TPA.
• Exports collapsed to ~10-12% of normal quarterly levels as West Asia disruptions halted Gulf styrene supply, spiked freight rates, and extended voyage times.
• Non-OEM demand plunged ~50% YoY due to high polystyrene prices and gas availability issues; OEM demand remained stable and marginally better.
• ABS compounds performed strongly; company shifting focus to ABS-based compounds and value-added applications with disciplined credit.
• Alternate styrene sourcing arrangements established; no domestic supply interruptions despite Gulf supply freeze.
• European EPS customer grades approved; exports to Europe expected to resume once shipping normalizes.
• Temporary import duty waiver on commodity polymers led to marginal import uptick (estimated 20k tons PS), but overall import trend in line with historical 87k tons/year.
• Industry de-growth in polystyrene was at par with company; EPS de-growth slightly better due to fragmented competition and specialized grades.

Analyst Q&A

• Q. Can you provide volume guidance for FY27?

  Giving any guidance at this stage when the situation is very fluid is very difficult.

• Q. What is the sustainability of this 19% margin?

  This margin which has come in, is like an aberration because of the global deltas were very-very strong... Those aberrations will get normalized over a period of time.

• Q. What is the current delta for GPPS and HIPS?

  Current delta for GP would be closer to USD250 to USD275... HIPS could be closer to USD350.

• Q. What will be the terminal ABS capacity after full expansion?

  It will be 140,000 nameplate capacity.

• Q. How large is the ABS compounds market and can you fill expanded capacity?

  I don't have any ready numbers of the market for ABS compounds. I know that whatever capacity we are putting there is enough demand... In the next three to four years we should be able to fully sell out that capacity.

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