Supreme Petrochem Limited reported challenging third-quarter results for FY26, with revenue declining due to volatile raw material prices and operational setbacks in its newly commissioned ABS manufacturing facility. The company held its earnings conference call on January 23, 2026, to discuss performance for the quarter and nine-month period ended December 31, 2025.

Financial Performance Overview

The company's standalone operating income for Q3FY26 reached Rs. 1,265 crores, representing a 10% year-on-year decline. This decrease was primarily attributed to falling styrene monomer (SM) prices, which averaged USD 810 in December 2025 compared to USD 1,040 during Q3FY25.

Operational Highlights

Despite revenue challenges, the company demonstrated volume growth in its core manufacturing operations. Sales volume of manufactured products increased to 91,265 MT in Q3FY26 from 85,537 MT in the corresponding quarter of the previous year. For the nine-month period, volumes reached 2,62,537 MT compared to 2,60,416 MT in the previous year.

The company's polystyrene plant operated at 80% capacity utilization during the quarter, while the EPS plant achieved 87-88% utilization rates. This improved performance was driven by increased demand from original equipment manufacturers (OEMs) toward the end of the quarter as styrene prices stabilized.

ABS Plant Challenges

The company faced significant operational challenges with its newly commissioned ABS plant. The facility, with an installed capacity of 70,000 MTPA, successfully started production in September 2025 and operated satisfactorily through October and November. However, operations were suspended in December 2025 due to malfunctioning of critical production equipment.

Engineering consultants, equipment suppliers, and technical collaborators have arrived at the plant site to evaluate repair options. The company emphasized that the equipment is under warranty and fully insured, minimizing financial impact from potential repairs or replacements.

Market Dynamics and Raw Material Trends

Styrene monomer prices experienced prolonged decline until November 2025 before stabilizing and showing upward bias. This price stabilization encouraged processors to increase their offtake of styrene products in December, supporting improved demand conditions.

The company noted that import trends showed increased volumes from Thailand rather than China for polystyrene products. Much of the increased import activity involved recycled or reprocessed materials used in applications like wall panels and photo frames, which don't compete directly with prime-grade polystyrene applications.

Financial Position and Future Outlook

Supreme Petrochem maintains a strong financial position with zero debt and continues funding all capital expenditure through internal accruals. As of December 31, 2025, the company held an investible surplus of Rs. 463 crores, providing financial flexibility for future growth initiatives.

The company expects improved performance in Q4FY26, driven by stronger OEM demand during the January-March period and stabilized styrene prices. Management indicated that trading volumes currently represent approximately 20% of total turnover, slightly down from 22-22.5% in the previous year.

For FY27, assuming successful recommissioning of the ABS plant by the end of the current financial year, the company targets volume growth of around 10%, with 3-4% contribution from base business and the remainder from ABS operations.

Supreme Petrochem Ltd has reported its unaudited financial results for the third quarter and nine months ended December 31, 2025, showing a notable decline in financial performance compared to the previous year. The company's Board of Directors approved these results at a meeting held on January 20, 2026.

Q3FY26 Financial Performance

The company's standalone financial performance for Q3FY26 reflects challenging market conditions and operational issues. Key metrics demonstrate a significant year-over-year decline across major parameters.

Nine-Month Performance Analysis

The nine-month period ending December 31, 2025, also witnessed substantial declines in key financial indicators. Revenue from operations decreased to ₹3,751.38 crores from ₹4,484.36 crores in the corresponding period of the previous year, representing a 16.35% decline.

ABS Plant Operational Challenges

A significant development during the quarter was the operational status of the company's ABS (Acrylonitrile Butadiene Styrene) plant. The first line of the ABS project with 70,000 TPA capacity at Amdoshi, District Raigad, Maharashtra, was successfully commissioned and production started from September 2025. However, operations were suspended in December 2025 due to malfunctioning of critical production equipment. The company is taking necessary action in consultation with the engineering consultant, equipment supplier, and technical collaborator to restore operations.

Exceptional Items Impact

The company reported exceptional items of ₹7.09 crores in Q3FY26, primarily related to new Labour Codes notified by the Government of India on November 21, 2025. This includes:

• Incremental gratuity liability: ₹5.30 crores
• Compensation towards leave encashment: ₹1.79 crores

These charges arose primarily due to changes in the "wage" definition under the new Labour Codes.

Consolidated Results

The consolidated financial results include the performance of subsidiary Xmold Polymers Private Limited, which the company acquired control of from April 1, 2025. Consolidated net profit for Q3FY26 stood at ₹30.67 crores compared to the standalone figure of ₹30.15 crores. For the nine-month period, consolidated net profit was ₹161.20 crores.

Financial Position

The company maintains its debt-free status, with finance costs primarily comprising interest expenses on leases under Ind AS 116. The paid-up equity share capital remains unchanged at ₹37.61 crores with a face value of ₹2 per share. The company operates in the 'Styrenics and Allied Products' segment, which constitutes a single reportable business segment.