Styrenix Performance Materials Limited Q3 FY26 Earnings Call Summary

Summary

Styrenix Performance Materials Limited - Q3 FY26 Earnings Call Summary Monday, February 02, 2026 4:00 PM IST

Event Participants

Executives 3 Bhupesh Porwal, Chintan Doshi, Rahul Agrawal

Analysts 8 Aditya Khetan, Krunal Shah, Manjeet, Meet Parikh, Nirav Jimudia, Pritesh, Rahul Agarwal, Tanish Jhaveri, Tushar, Vidhi Shah

Financials & KPIs (Standalone)

Financials & KPIs (Consolidated)

Geographic & Segment Commentary

• India (Standalone): ABS volumes doubled since 2022 without sacrificing spreads, despite global overcapacity. Management noted that while HIPS capacity is 100% utilized, GPPS utilization remains lower due to competition from unorganized imports.
• Thailand Subsidiary: Performance was severely impacted by a strategic decision to build inventory during the brand transition from INEOS (Novodur/Lustran) to Styrenix (Absolac/Absolan). This coincided with a 20-25% drop in raw material and finished goods prices, leading to substantial inventory losses.
• Specialty ABS (Global): Strategic focus on high-heat ABS for automotive and food-grade SAN. These products require long validation cycles (3-18 months) with global OEMs in China, Vietnam, and Japan.

Company-Specific & Strategic Commentary

• Brand Transition: Successfully retained 90% of Thailand customers during the transition to the Absolac and Absolan brands. Validation is ongoing for premium segments like EVs and medical devices.
• Capacity Expansion: Phase 1 of the ABS expansion (50 KT) is on track for H2 FY27. Total project cost for Phase 1 is estimated at ₹350 crores, funded through internal accruals and potential capex loans.
• Energy Cost Optimization: A hybrid power agreement is set to commence in Feb/March 2026, which is expected to reduce standalone power costs in future quarters.
• Import Substitution: Domestic demand for ABS is ~370 KT, with domestic production meeting less than 50%. Management sees significant room for growth despite new domestic capacities entering the market.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Thailand Inventory Issues

• Question: Why was there such a large loss in Thailand this quarter? (Aditya Khetan, Pritesh)
• Answer: We built inventory to bridge the period where we transitioned from the old brand to our own brand to ensure customer supply. Unfortunately, raw material and finished goods prices fell 20-30% during this period, leading to a valuation hit. 75% of the subsidiary loss is purely inventory-related. (Rahul Agrawal)

Market Competition & Spreads

• Question: Is the overcapacity in China a threat to Indian spreads? (Manjeet)
• Answer: China overcapacity has existed for years. Indian customers prefer local production for customization and delivery speed. Even with the withdrawal of BIS, we have seen negligible impact from Chinese imports. (Rahul Agrawal)

Capacity and Utilization

• Question: What is the status of the ABS expansion and current PS utilization? (Rahul Agarwal, Nirav Jimudia)
• Answer: HIPS is at 100% utilization. GPPS has more capacity (100 KT total PS), but it’s a price-sensitive market. ABS expansion Phase 1 (50 KT) will start in H2 FY27. (Rahul Agrawal)

Key Takeaway

Styrenix delivered a resilient standalone performance in Q3 FY26, with sales volumes growing 7.6% YoY to 51.1 KT and EBITDA margins expanding 80 bps to 11.7%. However, consolidated results were weighed down by the Thailand subsidiary, which reported a ₹39.3 crore loss primarily due to sharp inventory devaluations during a brand transition phase. Strategically, the company is focused on its 50 KT ABS expansion (Phase 1) due in H2 FY27 and is currently utilizing 100% of its HIPS capacity. While Thailand remains a drag due to low operating leverage and long validation cycles for specialty grades, management expects these technology capabilities to eventually benefit the Indian business. Looking ahead, the company expects robust domestic ABS demand to absorb new capacities, though FY26 volume growth will likely fall short of the 12.5% target due to earlier weakness in Polystyrene.