Supreme Petrochem has informed stock exchanges about receiving an independent Environmental, Social and Governance (ESG) rating from CFC Finlease Private Limited on December 22, 2025. The company disclosed this development under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

ESG Rating Details

The key aspects of the ESG rating assignment are outlined below:

Company's Position on the Rating

Supreme Petrochemicals Ltd has clarified its stance regarding the ESG rating assignment. The company emphasized that it did not engage CFC Finlease Private Limited for the purpose of obtaining this ESG rating. Additionally, the company has explicitly stated that it has not agreed to the rating in any manner.

The rating was assigned independently by CFC Finlease Private Limited based solely on publicly available information about Supreme Petrochemicals Ltd. This type of unsolicited rating assessment is conducted without direct involvement or request from the rated company.

Regulatory Compliance

The disclosure was made in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, which mandates listed companies to inform stock exchanges about material events and developments. The company has notified both BSE Limited and National Stock Exchange of India Ltd about this ESG rating assignment.

Supreme Petrochemicals Ltd has requested the stock exchanges to take the above information on record, fulfilling its regulatory disclosure obligations regarding the independent ESG rating assessment.

Supreme Petrochem has received a credit rating outlook revision from India Ratings and Research (Ind-Ra), which changed the company's outlook to Stable from Positive while affirming its IND AA- rating. The revision affects both the issuer rating and bank loan facilities worth ₹19,000.00 million, reflecting recent operational challenges and delayed project timelines.

Rating Action Details

India Ratings has revised its analytical approach to a full consolidated view of Supreme Petrochem and its subsidiary Xmold Polymers Pvt Ltd, following Supreme Petrochem's 80% acquisition in April 2023. The rating action encompasses multiple instruments:

Performance Challenges Drive Outlook Revision

The outlook revision reflects weaker-than-expected performance across Supreme Petrochem's existing businesses during the first half of the fiscal year. The company experienced an 18% year-on-year revenue decline due to price corrections and subdued demand from downstream sectors, particularly appliances affected by a weaker summer season and postponed purchases following goods and services tax rate reduction announcements.

Additionally, a six-month delay in the commencement and ramp-up of production at the company's acrylonitrile butadiene styrene (ABS) facility has deferred the increase in value-added products proportion, limiting near-term visibility on EBITDA reaching ₹5.00-6.00 billion levels.

Strategic Strengths Support Rating

Despite operational challenges, India Ratings highlighted several factors supporting the rating affirmation. Supreme Petrochem maintains its leadership position in India's oligopolistic polystyrene (PS) and expandable polystyrene (EPS) markets, with market shares of approximately 56% in PS and 59% in EPS.

Key Rating Strengths:

• Leadership position in oligopolistic PS industry with business profile expected to strengthen post-ABS capacity ramp-up
• Increasing share of value-added products to offset inherent volatility in PS market
• Planned capital expenditure to continue being fully funded by internal accruals
• Strong credit profile expected to remain intact

Capital Expenditure and Expansion Plans

Supreme Petrochem expects to maintain significant capital expenditure intensity over the next few years, with budgeted spending of approximately ₹7,050.00 million. The company has historically funded large capital expenditures entirely through on-balance sheet cash and operational cash flows, with average capex intensity of around 5% over recent years.

A significant portion of planned expenditure pertains to Phase 2 of the ABS expansion plan (approximately 70,000 MT capacity), estimated at ₹3,000.00-3,500.00 million. Management intends to base this capex on the pace of Phase 1 capacity ramp-up.

Financial Position and Liquidity

While Supreme Petrochem's net debt (including LC acceptances) stood at ₹191.00 million in the recent half-year, India Ratings expects this to be temporary. The elevation in net debt resulted from doubling of net working capital, primarily due to higher raw material inventory maintenance and increased LC acceptances from rising raw material imports and ongoing capex.

The company maintains ₹1.00 billion in unutilized fund-based limits and has consistently generated positive cash flow from operations since FY05, supporting its strong liquidity position.

Outlook and Rating Sensitivities

India Ratings expects Supreme Petrochem to return to net cash positive position following normalization of working capital levels and ABS facility ramp-up in the future. The agency anticipates EBITDA recovery driven by likely price bottoming and gradual ramp-up of the higher-value ABS facility.

Positive rating action could result from sustained profitability levels of ₹5.50-6.00 billion with enhanced product diversification while maintaining the credit profile. Conversely, sustained lower-than-expected profitability, delays in ABS project ramp-up, or significant depletion of liquidity buffers could lead to negative rating action.