Styrenix Performance Materials Limited
Q1 FY26
Call date · August 14, 2025
1 · Management Commentary
Key Positives
- Strong demand led to record sales volumes in India: 51.8 KT in Q1 FY26, up 8.1% QoQ.
- Consolidated revenue growth: INR 943.5 crores in Q1 FY26, up 0.5% QoQ.
- Successful completion of debottlenecking exercise and ongoing expansion plans on schedule.
- Thailand acquisition integration progressing, with SAP implementation and new sales offices across Asia.
- Specialty ABS and high-value product mix in Thailand and India.
Key Negatives
- Realizations and gross/EBITDA spreads declined due to early monsoon and product mix changes.
- Thailand plant operating at low utilization (50–55%) with higher conversion costs than India.
- Muted demand in certain segments (air conditioning, some appliances) due to seasonal factors.
- No specific guidance on inorganic acquisitions; profitability ramp-up in Thailand will take time.
Forward Guidance
- Capex: INR 325–350 crores planned by March 2027 for ABS expansion; PS capex under engineering study (not included in current guidance).
- ABS capacity expansion: 50% to come online in next financial year, remainder by FY28; HIPS expansion to follow similar timeline.
- Thailand ramp-up: Focus on increasing utilization and customer revalidation; no specific volume guidance yet.
- Power cost reduction in India via hybrid power SPV by year-end.
- Targeting 10–13% annualized volume growth in India; Thailand growth to follow as integration progresses.
- No immediate plans for further inorganic acquisitions disclosed.
2 · Q&A Highlights
Q 1 (Composite): What is the outlook for volume growth and demand given muted segments and Thailand ramp-up?
A (Management):
• India: On track for 10–13% annualized volume growth despite seasonal softness; Q1 volumes highest ever.
• Thailand: Ramp-up will take time due to customer revalidation and low starting utilization; confident of future growth.
Q 2 (Composite): Status and timeline of ABS and PS capacity expansions; capex plans and spend details?
A (Management):
• ABS: 50,000 tons expansion on track for next financial year, remaining 50,000 tons by FY28.
• PS: Engineering study ongoing; capex not included in current INR 325–350 crore guidance.
• Capex spend details to be shared at half-year; Q1 spend not disclosed.
Q 3 (Composite): Thailand integration—progress, profitability trajectory, and cost reduction measures?
A (Management):
• SAP and IT controls implemented; team integration ongoing.
• Profitability improvement depends on higher utilization and process improvements; no major capex needed for cost reduction.
• Conversion costs currently higher than India; focus on operating leverage.
Q 4 (Composite): Product mix, specialty ABS, and new product opportunities (e.g., aerospace, PC-ABS blends)?
A (Management):
• Specialty ABS is 60–70% of ABS sales; Thailand acquisition adds unique grades (e.g., bimodal rubber, refrigerant ABS).
• Exploring aerospace and carbon fiber-reinforced ABS; PC-ABS blends expected to grow with automotive/electronics sectors.
Q 5 (Composite): Competitive landscape, pricing pressure, and import substitution?
A (Management):
• Domestic capacity expansions (including peers) expected to reduce imports; market opportunity remains robust.
• Some pricing parity with imports, but domestic players offer added value and can command better pricing in many grades.
• No significant ABS exports from India currently.
Q 6 (Composite): Cost structure and efficiency initiatives in India and Thailand?
A (Management):
• Ongoing efforts to reduce costs; hybrid power SPV to lower power costs in India by year-end.
• No major low-hanging fruit identified; continuous improvement focus.
Q 7 (Composite): Capex funding, dividend policy, and balance sheet strength?
A (Management):
• Dividend payout aligns with cash availability and capex requirements; philosophy is to return excess cash to shareholders.
• Sufficient cash and capex planning in place; inventory levels being normalized post-acquisition.
3 · Other Key Numbers
- Standalone Q1 FY26 sales volume: 51.8 KT (vs 48.1 KT in Q4 FY25)
- Standalone revenue: INR 721 crores (Q1 FY26), INR 701 crores (Q4 FY25), INR 700 crores (Q1 FY25)
- Standalone PBDIT: INR 86.1 crores (11.9%), INR 83 crores (10.8% Q4 FY25), INR 92.2 crores (13.2% Q1 FY24)
- Standalone PAT: INR 54.9 crores (7.6%), INR 53.2 crores (7.58% Q4 FY25)
- Consolidated Q1 FY26 sales volume: 67.2 KT (vs 64 KT in Q4 FY25)
- Consolidated revenue: INR 943.5 crores (Q1 FY26), INR 939.7 crores (Q4 FY25)
- Consolidated PBDIT: INR 99.8 crores (10.6%), INR 89.9 crores (9.6% Q4 FY25)
- Consolidated PAT: INR 51.9 crores (5.5%), INR 56.2 crores (6% Q4 FY25)
- Thailand Q1 sales volume: 16,000–17,000 tons (approximate, as per management)
- Thailand capacity utilization: 50–55%
- ABS specialty share: 60–70% of ABS sales
- ABS market import: 140 KTPA (India, as per analyst)
- Planned India capacity (FY26): 210,000–215,000 tons (all products)
- Capex guidance: INR 325–350 crores by March 2027 (ABS only; PS capex not included)
- Dividend: INR 50–55 crores (as per balance sheet discussion)
- ASALAC/PC-ABS blends: 100–150 tons/month currently
- Automotive and appliances each: ~40% of ABS sales; packaging ~40% of PS sales
- Air conditioning segment down ~30% in Q1 FY26 (not automotive)
- No disclosure of SAN/ABS product mix in Thailand due to competitive reasons
- External SAN sales volume for FY26: Not disclosed
- Q1 capex spend: Not disclosed (to be shared at half-year)
- Thailand peak revenue potential: 70–80% higher than current, if utilization increases and product mix remains similar
All figures as stated in the call; if not disclosed, marked accordingly.