Supreme Petroch. Q1 FY26 Results (NSE: SPLPETRO)

27 Jul 2026 · Analysis by Alpha Inflection

Signal: Margin expansion

The read

Q1FY26 was a standout quarter — revenue +22% YoY, EBITDA margin surged to 20.2% (highest in over a year) from 15.4% a year ago — driven by sharp input cost deflation (raw material % of revenue dropped from 72% to 61%) and operating leverage. PAT nearly tripled to ₹238 Cr. The company announced a new 80,000 TPA polystyrene line (₹325 Cr capex by March 2029), signalling confidence in demand. The stock trades at 44x P/E — multiple already prices in recovery; sustaining this margin will require stable input spreads.

P&L walk

Revenue surge of 22% YoY driven by volume growth in styrenics; gross margin expanded sharply as raw material costs fell to 61% of revenue vs 69% a year ago (800bps improvement); EBITDA margin of 20.2% is the highest in recent quarters, up 480bps YoY and 390bps QoQ; PAT grew 189% as operating leverage amplified; other income added ₹17.4 Cr (+14% YoY); tax normalized higher.

Key positives

• Revenue grew 22.3% YoY to ₹1,734 Cr — volume-driven recovery after 3-year CAGR decline of -11.4%
• EBITDA margin expanded 480bps YoY to 20.2% — raw material costs fell sharply (61% of rev vs 72% a year ago)
• PAT ₹238 Cr, +189% YoY — highest quarterly profit in over 2 years
• Company remains debt-free; finance cost only ₹3.5 Cr (lease interest)
• Capex announcement: 80,000 TPA capacity addition (existing 3,00,000 TPA), ₹325 Cr investment by March 2029 — long-term growth visibility

Key concerns

• P/E of 44x vs industry 16x — valuation already prices in the earnings rebound; any margin normalization could compress multiple
• Depreciation jumped 52% YoY to ₹27.9 Cr — heavy capex cycle will continue to increase D&A
• Other income of ₹17.4 Cr (10% of PBT) provides tailwind but not recurring from operations

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