Supreme Petrochem Q2 Net Profit Drops 47% to ₹481.9 Million

Supreme Petrochem , a key player in the petrochemical industry, has reported its financial results for the second quarter, revealing a significant decline in profitability and revenue.

Financial Performance Highlights

Metric	Q2 Current Year	Q2 Previous Year	Change
Net Profit	₹481.90 million	₹903.40 million	-47%
Revenue	₹11.00 billion	₹15.04 billion	-27%
EBITDA	₹505.00 million	₹1.25 billion	-60%
EBITDA Margin	4.59%	8.32%	-3.73 percentage points

Supreme Petrochem has experienced a substantial decline in its financial performance for the second quarter compared to the same period last year. The company's net profit decreased by 47% to ₹481.90 million from ₹903.40 million in the previous year.

Revenue and Profitability

The company's revenue also saw a significant reduction, falling to ₹11.00 billion from ₹15.04 billion year-on-year, marking a 27% decrease. This decline in revenue has had a cascading effect on other financial metrics.

EBITDA and Margin Compression

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) fell sharply by 60% to ₹505.00 million from ₹1.25 billion in the previous year. The EBITDA margin compressed to 4.59% from 8.32%, indicating a substantial decrease in operational efficiency.

The compression in EBITDA margin suggests that the company faced challenges in maintaining its profitability levels amidst declining revenues. This could be due to various factors such as increased operational costs, market pressures, or changes in the product mix.

While the specific reasons for the decline are not provided in the available data, the significant drop in revenue and profitability metrics indicates a challenging quarter for Supreme Petrochem.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
+0.64%	+4.86%	-4.17%	+25.50%	+8.20%	+490.50%

Supreme Petrochem Ltd (SPL), a leading player in the styrenics industry, has announced significant expansion plans and released its financial results for the second quarter. The company has commissioned its first Acrylonitrile Butadiene Styrene (ABS) production line and reported its quarterly performance amidst challenging market conditions.

New ABS Production Line

SPL has successfully commissioned its first line of ABS production with a capacity of 70,000 TPA at Amdoshi, Dist Raigad, Maharashtra. The project, implemented under license from M/s Versalis S.P.A., Italy, commenced production on September 25. This expansion marks a significant milestone in the company's growth strategy, diversifying its product portfolio and enhancing its market position in the engineering plastics segment.

Financial Performance

For the quarter ended September 30, Supreme Petrochem reported the following consolidated financial results:

Metric	Q2 Current	Q2 Previous	YoY Change
Revenue from Operations	₹1,100.20 crore	₹1,505.60 crore	-26.9%
Operating EBITDA	₹77.60 crore	₹125.20 crore	-38.0%
Net Profit	₹48.20 crore	₹90.30 crore	-46.6%
EPS (Diluted)	₹2.57	₹4.80	-46.5%

The company experienced a significant decline in revenue and profitability compared to the same quarter last year. This performance was attributed to several factors, including:

Extended and heavy monsoon causing weak demand for cooling devices
Advance notification of GST rate reductions on durable goods, resulting in deferred purchases
Subdued business and economic activities across major advanced economies
Changed trade flows due to tariffs imposed by the USA
Destocking by processors due to falling styrene monomer and polystyrene prices

Operational Highlights

Total sales volume of manufactured products decreased to 76,962 MT in the current quarter from 81,566 MT in the same quarter of the previous year.
For the first half of the current fiscal year, sales volume was lower by 2.3%, from 174,813 MT to 170,826 MT.
Styrene monomer prices have been on a downward trend, currently at about US$ 800 PMT, down from US$ 940 PMT at the end of June, putting downward pressure on margins.

Dividend Declaration

The Board of Directors has declared an interim dividend of ₹2.50 per equity share (125% on face value of ₹2 per share) for the current financial year.

Future Outlook

Despite the current challenges, Supreme Petrochem's expansion into ABS production demonstrates the company's commitment to long-term growth and diversification. The new ABS line is expected to strengthen SPL's position in the engineering plastics market, catering to industries such as automotive, appliances, and consumer goods.

As the company navigates through the current market headwinds, the focus remains on operational efficiency, product diversification, and capitalizing on the new ABS production capabilities to drive future growth.

Investors and stakeholders will be watching closely to see how Supreme Petrochem leverages its expanded product portfolio to overcome the present market challenges and return to a growth trajectory in the coming quarters.