Supreme Petrochem in FY26: Volumes Held Up, Margins Rebounded in Q4, and ABS Began to Scale

Supreme Petrochem closed FY26 with a mixed full-year picture but a strong finish to the year. Operating income for FY26 was INR 53,384 million, down 11.4% year on year, while operating EBITDA was INR 5,148 million, down 3.3%. Net profit for the year stood at INR 3,273 million, down 16.2%, with PAT margin at 6.13%.

The fourth quarter told a different story. Q4 FY26 operating income rose to INR 15,870 million, operating EBITDA surged to INR 2,532 million, and PAT increased to INR 1,680 million. Operating EBITDA margin expanded to 15.95% in Q4 FY26 from 9.40% in Q4 FY25, helped by higher volumes, better spreads, and a relatively steady styrene monomer environment through most of the quarter.

Management also used the year-end interaction to underline two themes that will matter in FY27: the gradual scaling of the newly commissioned mass ABS line and the company’s ability to manage feedstock and logistics disruptions after the West Asia conflict impacted shipping through the Strait of Hormuz.

FY26 performance: lower realizations offset volume growth

For FY26, Supreme Petrochem’s volumes continued to rise, but realizations moved in the opposite direction. Total sales volume of manufactured products increased 2.0% to 363,203 MT in FY26 from 355,967 MT in FY25. However, the company explained that average styrene monomer prices were about 17% lower during FY26 compared to the previous year. This reduced realizations and pulled reported revenue lower even with volume growth.

Operationally, capacity utilisation for the year, based on available effective expanded capacity, was stated to be over 80%. The company also noted that sales quantities reported are net of internal transfers, including products transferred for compounding and for XPS insulation boards.

Financial summary

Note: Total EBITDA includes other income and excludes exceptional items.

ABS commissioning: early scale-up with temporary constraints

A key strategic milestone in FY26 was the commissioning of the first line of the mass ABS plant at Amodshi. The company stated in the presentation that the first line was commissioned at the end of September 2025 and production commenced. ABS, being an engineering plastic, has applications across automotive interiors, e-scooters, appliances, and consumer products.

In the earnings call, management clarified that the plant faced an equipment failure and has restarted operations using an alternate arrangement. This has allowed operations at roughly 65% of the design capacity until the impacted equipment is repaired. Management indicated the plant can return to 100% of design capacity once repairs are completed. The product, according to management, has been well accepted in the market.

Supreme also stated it continues to work on the second ABS line and is still aiming for the earlier timeline previously indicated, despite the incident affecting the first line.

EPS expansion commissioned after year-end

On EPS, the company commissioned an expansion at the Amodshi plant on April 14, 2026, enhancing EPS capacity from 85,000 MTA to 115,000 MTA. Management linked EPS growth to packaging and construction-linked applications such as insulation for cold storages.

The management also mentioned that certain EPS grades have been approved in Europe and that, during peak months, the company was unable to supply export demand because it prioritised domestic requirements. The incremental capacity is expected to support both domestic growth and exports, subject to logistics normalisation.

Feedstock disruption and demand mix: a key near-term variable

The most material external shock described during the call was the disruption to shipping due to the West Asia conflict and the reported blockage of the Strait of Hormuz. Management said suppliers in the Middle East could not ship in March 2026, but Supreme had sufficient stock and in-transit supplies and also arranged alternate sourcing to meet domestic demand.

At the same time, management noted demand divergence between customer groups. OEM demand was described as healthy, while non-OEM demand saw softness, especially in April, which management linked to high prices, labour availability issues and gas shortages for some processing units.

The company also explained that it is not entering into new contracts with OEMs until conditions stabilise, as raw material pricing, freight, and other costs remain fluid.

Balance sheet: debt-free position and dividends

Supreme Petrochem continued to highlight its balance sheet strength. Management stated the company remains debt free with an investable surplus of INR 700 crore at the end of March 2026 and that all capital expenditure is being met through internal cash accruals.

The board recommended a final dividend of INR 8.00 per equity share. Along with an interim dividend of INR 2.50 per share declared earlier, the total dividend for FY26 stands at INR 10.50 per equity share (face value INR 2).

FY27: conditional guidance and capex

Management provided a conditional operating outlook for FY27. If normalcy returns by June end and the business environment is normal from the second quarter onwards, the company expects 8% to 10% volume growth in FY27, supported by ABS operations and the broader product portfolio.

On capital expenditure, management guided to around INR 250 crore for FY27 for the company as a whole. For the Haryana project, management said major PS and EPS capex is not being committed because IOC’s styrene monomer plant timeline is delayed. Near-term spending at the site would be more focused on infrastructure and related activities until there is clarity on IOC commissioning.

Takeaways

FY26 reinforced Supreme Petrochem’s positioning as a high-scale styrenics player, but also showed how sharply reported revenue can swing with feedstock prices even when volumes rise. Q4 FY26 demonstrated the company’s ability to expand margins when spreads and operating leverage move in its favour.

FY27 will likely be shaped by three measurable operational drivers discussed by management: scaling the mass ABS plant from the current constrained operating level, absorbing the newly commissioned EPS expansion into higher sales, and navigating feedstock and freight disruption until shipping lanes normalise. The company’s debt-free balance sheet and internal funding of capex remain central pillars in this transition.