SPLPETRONSEQ3 FY24January 25, 2024

Supreme Petrochem Limited

5,443words

112turns

7analyst exchanges

0executives

Key numbers — 40 extracted

INR1187 crore

hird quarter and nine months of the financial year 2024. The operating income for the quarter was INR1187 crores, which was about 0.6% over the last year. The operational EBITDA is about Rs.95 crores with a ma

0.6%

the financial year 2024. The operating income for the quarter was INR1187 crores, which was about 0.6% over the last year. The operational EBITDA is about Rs.95 crores with a margin at 8%. The total E

Rs.95 crore

rter was INR1187 crores, which was about 0.6% over the last year. The operational EBITDA is about Rs.95 crores with a margin at 8%. The total EBITDA with other income is 110 crores. The net profit after tax

was about 0.6% over the last year. The operational EBITDA is about Rs.95 crores with a margin at 8%. The total EBITDA with other income is 110 crores. The net profit after tax was at Rs.68 crores.

110 crore

erational EBITDA is about Rs.95 crores with a margin at 8%. The total EBITDA with other income is 110 crores. The net profit after tax was at Rs.68 crores. On the operational front: Main raw materials st

Rs.68 crore

a margin at 8%. The total EBITDA with other income is 110 crores. The net profit after tax was at Rs.68 crores. On the operational front: Main raw materials styrene monomer prices were within the range dur

1.7%

quarter. The company's sales of manufactured products during the quarter grew only marginally at 1.7%. However, over the nine months period, the quantity sold increased by 12%. During the quarter o

12%

rew only marginally at 1.7%. However, over the nine months period, the quantity sold increased by 12%. During the quarter our Chennai EPS plant was non-operational for about 15 days due to cyclone, w

Rs.3691 crore

nd this is all in progress. For the nine months year up to December 2023, our revenues stood at Rs.3691 crores, which are down by 5% over the last year, for the same period. The operating EBITDA was INR292

the nine months year up to December 2023, our revenues stood at Rs.3691 crores, which are down by 5% over the last year, for the same period. The operating EBITDA was INR292 crores with margin of 7.

INR292 crore

91 crores, which are down by 5% over the last year, for the same period. The operating EBITDA was INR292 crores with margin of 7.9%. The total EBITDA with other income is Rs.340 crores, PAT is INR215 crores.

7.9%

5% over the last year, for the same period. The operating EBITDA was INR292 crores with margin of 7.9%. The total EBITDA with other income is Rs.340 crores, PAT is INR215 crores. Company continues to

Guidance — 20 items

Neeraj Jamodia

“So, was it because the user industries within our target segment was not doing well, or was it because of the imports coming to India, which has impacted our volumes?”

Neeraj Jamodia

“Sir you mentioned in one of your presentation slides that we have entered into an agreement with Tata Power to supply the renewable power for our Amdoshi plant which would start operating from 01 of FY25?”

Rakesh Nayyar

“So, what we have said is that, of our total requirement up to 50% of our power consumption will be based on the renewable power at our Nagothane project, that is Amdoshi plant.”

Rakesh Nayyar

“Part of which 12.5 megawatt is what we will be sourcing from through this SPV, and we also have installed solar panels on rooftop of our warehouse and that would give us another around one megawatt.”

Rakesh Nayyar

“Around 30% to 40% there will be savings on unit we will consume through the solar power generation.”

Rakesh Nayyar

“I'm telling you less than five years, I really can't tell you whether three or four, but we estimate it will be less than five years for us.”

Sailesh Raja

“Sir, again in Haryana project, we have given separate number for EPS and EPS 3D panels.”

Rakesh Nayyar

“Which on a three shift basis this will be bigger capacity, but then we are not in the downstream business.”

Sailesh Raja

“So, along with iron mesh we will be supplying?”

Sailesh Raja

“Along with iron mesh we will be supplying this product or how it is?”

Risks & concerns — 3 flagged

But sir when we look on a nine monthly basis, the numbers are quite bad like we are standing at Rs.24, Rs.2S per kilo gross spread, which is almost a 30% decline on Y-o-Y basis.

— Aditya Khetan

So, do you think so, all these things as a risk in the near term and if these capacities come up, so we should be able to like maintain our market share?

— Aditya Khetan

And as of now, it looks like we would be nearing that because of this slowdown we may be closer to 45,000 or so, we should we still be able to do it.

— Rakesh Nayyar

Q&A — 7 exchanges

Sir, I have two, three questions to ask. So, first is on the industry volume growth for polystyrene in Q3, because as we see that our volume growth was just 1.7% on Y-o-Y basis. So, was it because the user industries within our target segment was not doing well, or was it because of the imports coming to India, which has impacted our volumes?

Rakesh Nayyar

During the quarter, the polystyrene market was flat and it is not because of the imports, imports are marginally down as compared to the last year. This is more because of industries, who are consuming our materials, the demand from their side was low. From OEMs, the appliance manufacturers the demand for the current year is down by almost 5% as compared 2 to the previous year. Whereas beginning of the year, the kind of ideas what we got from the OEM manufacturers that they would grow by almost 8% to 10%. But then right now the demand from them till December end was less by 5%, compared to las

Sir, my question is related to the investments that we are doing in Haryana. So, could you please talk about the revenue potential of all the products put together if we take prevailing realization and also what is the payback period we are expecting from this 800 crores investment?

Rakesh Nayyar

Once all the projects are implemented and the full capacity they would generate at current prices, the revenue close to 1900 odd crores. And once the investments are made and the plants are operational, we assume that our simple payback should be in less than five years. Okay. So, usually our payback it won't be more than three, four years, right? I'm telling you less than five years, I really can't tell you whether three or four, but we estimate it will be less than five years for us. Okay. Sir, again in Haryana project, we have given separate number for EPS and EPS 3D panels. So, for the 1 m

Sir, my first question was onto the volume side, this quarter we had witnessed almost a 13% drop in volume. So, on quarter-on-quarter basis, I believe the festive demand was good and there was no big reason so we could portray such a big dip in volume sequentially. Is there anyone off like or what is the big reason like for this volume drop?

Rakesh Nayyar

The festive season is over by the third week of October itself by when the supplies are already made to the processors. And November and December are the lean months always. If you look at the year-on-year, last year also in this quarter, we have sold similar quantities only, because after the festive season is over the demand always goes down. And particularly also the OEMs generally shut down or they also slow down and their inventory building only starts from January onwards. So it's not really comparable on a Q-on-Q basis, but on a year-on-year basis, the volumes are all in-line. Okay. So,

Hi, sir two or three questions. The first one if you can share the rationale for setting up this property in North India in Haryana. If you can share that since we have around 337 acres of land in Nagothane and around 14, 15 acres in Chennai?

Rakesh Nayyar

See, North is a big market, almost 40% of the volumes of PS and EPS for these products is in the Northern India. And, secondly in future the styrene monomer plant of Indian Oil Corporation is also coming up near Panipat. So, considering the raw material sourcing 8 availability and likely market growth North, we thought that there should be another growth center for us. One we have in South, one we have in West and we should be now in North. So, this is the rationale for our moving to North now. Sir this would probably be the first kind of a plant which we will have for styrene monomer with IOC

Sir, can you just walk us through the time line for commissioning for ABS line. So, when is that getting commissioned?

Rakesh Nayyar

That should be ready by the end of this calendar. Okay. And sir how the procedure of customer approval works here, because ABS being a mass market and there are very niche segments within the ABS like medical devices or somebody was talking about through various news articles that even on the EV side there's a significant opportunity as the weight of the battery needs to be reduced and where polymers like ABS could come handy. So, how we are moving towards our ABS line? We shall be starting our seed marketing of the mass ABS shortly. There is BIS applicable to the ABS now in India. So we have

Sir my question was on to the export side. Sir last two to three quarters we had witnessed so good exports momentum across 16% of our total volumes versus the earlier range of 7% to 8%. So, this quarter also like so, despite your slowing volumes and also despite of 15% to 16%.

Rakesh Nayyar

Your voice cracked Aditya can you repeat your question please? Sir, my question was onto the export side. So, for the last two to three quarters we had witnessed a good export momentum. So now with this recent issue of the Red Sea and also the export demand is coming down. So are we witnessing this run rate to like go down from this level? See, last quarter there was a setback, some small setback we had in terms of the freight cost and all that in the month of December. And it continues currently in January also. So we are exporting more in the Asian market or the Gulf market where we don't ha

Thank you very much gentlemen for attending this cali for us. Thank you.

Management

Speaking time

Rakesh Nayyar

Neeraj Jamodia

Sailesh Raja

Aditya Khetan

Moderator

Rohit Ohri

Anuj Sonpal

On the operational front

Opening remarks

Anuj Sonpal

Thank you Lizann. Good evening, everyone and a very warm welcome to you all. My name is Anuj Sonpal from Valorem Advisors. We represent the Investor Relations of Supreme Petrochem Limited. On behalf of the company, I'd like to thank you all for participating in the company's earnings call for the Third Quarter and Nine Months of Financial Year 2024. Before we begin, let me mention a short 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 beliefs as well as assumptions made by and information currently available to 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 call is purely to educate and bring awareness about the company's fu

Rakesh Nayyar

Thank you Anuj. Good evening, everybody. It's a pleasure to welcome you to the earnings conference call for the third quarter and nine months of the financial year 2024. The operating income for the quarter was INR1187 crores, which was about 0.6% over the last year. The operational EBITDA is about Rs.95 crores with a margin at 8%. The total EBITDA with other income is 110 crores. The net profit after tax was at Rs.68 crores.

On the operational front

Main raw materials styrene monomer prices were within the range during the quarter. The company's sales of manufactured products during the quarter grew only marginally at 1.7%. However, over the nine months period, the quantity sold increased by 12%. During the quarter our Chennai EPS plant was non-operational for about 15 days due to cyclone, which caused heavy rains and floods in early December. Cyclone resulted in damage to some items of the fixed assets and some parts of the raw material, finished goods and stores and spares. The insurance company has initiated the surveying process and has appointed surveyors and this is all in progress. For the nine months year up to December 2023, our revenues stood at Rs.3691 crores, which are down by 5% over the last year, for the same period. The operating EBITDA was INR292 crores with margin of 7.9%. The total EBITDA with other income is Rs.340 crores, PAT is INR215 crores. Company continues to remain debt free with an investable surplus of

← All transcripts SPLPETRO stock page →

Supreme Petrochem Limited

Market Movers