Supreme Petrochem Ltd

Ladies and gentlemen, good day, and welcome to the Supreme Petrochem Limited Q1 FY '26 Earnings Conference Call.

As a reminder, all participants'lines will be in the listen-only mode. And there will be an opportunity for you to ask questions .after the presentation concludes, Should you need assistance during the conference call, please signal an operator by pressing your touchtone phone. Please note that this conference is being recorded' I now hand the conference over to Ms. Nupur Jainkunia from Valorem Advisors. Thank you, and over to you, ma'am.

Thank you. Good evening, everyone, and a warm welcome to you all. My name is Nupur Jainkunia from Valorem Advisors.

We represent the lnvestor Relations of Supreme Petrochem Limited. On behalf of the Company, I would like to thank you allfor participating in the Company's earnings call for the 1st Quarter of the FinancialYear 2026.

Before we begin, a quick cautionary statement:

Some of the statements made in today's Conference Call may be forward-looking in nature.

Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differfrom those anticipated. These statements are based on management's beliefs, assumptions made by an information currently available to management. Participants are cautioned not to place any undue reliance on these forward-looking statements when making any investment decision. The purpose of today's Earnings Conference Call is purely to educate and bring awareness about the Company's fundamental business and the financial quarter under review.

Now lwould like to introduce you to the Management participating with us in today's Earnings Call and hand it over to them for their opening remarks. We have with us Mr.

Rakesh Nayyar- Executive Director and CFO, Mr. Dilip Deole - Chief Executive of Finance and Accounts, and Mr. D. N, Mishra - Company Secretary. Page 1 o'f 14

e, Without any further delay, I request Mr. Rakesh Nayyar, sir, to start with his opening remarks. Thank you, and over to you, sir, Thank you, Nupur. Good evening, everybody. lt is a pleasure to welcome you to the earnings conference call for the lst Quarter of the Financial Year 2026.

Let me brief you on the financial performance of the quarter, followed by some of the key operational highlights:

On a standalone basis, the operating income for the 1st Quarter was approximately Rs, 1,386 crores, which declined by 12% on year-on-year mainly on account of lower SM prices. SM prices in the relevant period for the last year were around S1,150 for the quarter, whereas this year it was around S1,000.

The operating EBITDA was reportedly at approximately Rs, 115 crores, which is down by 29% year-on-year. The EBITDA margin stood aL9.36% for this quarter, The net profit after tax was around Rs. 81 crores for the Lst Quarter.

On the operational front, the Company's sales volume of manufactured products in the 1st Quarter of FY '26 increased bV 0.5% only on a year-on-year basis to 93,853 MT.

On the CApEX project, pre-commissioning activities for the first phase of the ABS project are ongoing with support from our technical collaborators, M/S Versalis, we expect commercial operations now to commence in this current quarter' During the quarter, our acquisition of Xmold Polymers was completed. The integration of Xmold operations and processes with SPL's business is currently underway' The Company continues to remain debt free with an investable surplus of over Rs. 700 crores as at the June 2025.

Now with this, we open the floor for question-and-answer sessions. Thank you.

Thank you very much. We will now begin the question-and-answer session. The first question is from the line of Aditya Khetan f rom SMIFS lnternational Equities' Sir, just a couple of questions. Sir, first on to this quarter. Sir, generally QL seems to be a muted quarter only when we look at the history of the last, so two to three years. And in this Page 2 of 14

,o, quarter, because of deClining styrene prices, the numbers has been quite lower, So, how you see this performance is to improve in the subsequent quarters because this is a quarterly phenomenon? And how things will pan out for the rest of the year?

Quarter f. is actually not really muted quarter, it is always a better quarter, But this year, there were two reasons for the quarterly performance to be not in line with the previous year's quarter. One, the styrene prices, which were kind of stable, as lsaid in the last interaction, till mid-March or so, And thereafter, the styrene prices dropped. And by end of April, again, therT became stable. April end onwards, the prices are stable. But the fall happened within the six weeks or so. This impacted the margins of the Company in the 1st Quarter.

And also, the OEM sales were lower because of the unseasonal rains which impacted their lifting for the cooling devices, like ACs and refrigerators. Their sales were down and in turn our lifting was down, and the margins were under pressure. So, these two were the major reasons affecting the performance in this quarter.

Got it. Sir, on to the styrene prices. Sir, this much drop in prices like, drop of roughly 15%, 20%. This is largely because of higher capacities built up in China, and now they have started to import or the demand at the ground, so that is itself also faltering. What is the reason for this?

No. See, the Chinese capacity has been there for some time now, but then the prices are a factor of many things from crude onwards to the delta between the naphtha and benzene, benzene to SM. I would therefore not really comment on the styrene prices why they went down globally. But then the fact is that they are stable since April end. They were stable for the last full year, but in the six weeks, they fell down. And that impacted us, our performance in this quarter.

Got it, Sir, in this quarter, sir, have we consolidated the Xmold Polymer numbers also in this quarter?

There is a consolidated results also, but what numbers I have given you, they were for the standalone results.

Okay. Got it. Sir, on to the ABS part. Sir, for this fiscal FY '26, sir, what volumes we are building in that we could achieve? And what numbers on top-line? And for FY'27 also, what could be the number we can achieve?

This will be our first year and maybe six months of operations. First few months will certainly go in the testing, trial, acceptance of the product by the processors and the molders. So, we expect that of the six months period maybe we will be operating at 50% to 60% and then we Page 3 of 14

,€) Aditya Khetani will start ramping up. But the in next year, that is FY '27, we expect that we should be 80% plus.

Got it. And sir, just a clarification from both the phases. From Phase l and Phase 2, combined top-line would be around Rs.2,000 crores as we had mentioned earlier?

Yes. On a IOO% capacity utilization, it will be Rs' 2,000 crores' Got it, so, sir, on this Phase 1, 5o%,60%, Rs.40o crores to Rs, 500 crores should be the top- line figure?

I have not calculated that, so I will not comment on that, Aditya Got it. sir, just one last question. sir, on to the global to demand supply dynamics, you see there is a cycle standing, like, are we standing in the mid, and what are the chances, like, thls could improve or this could be maintained, like, for the next couple of quarters? Any senses on this part?

See, the issue is only how the trade flows change and how the American agreement shape up with the rest of the world. And if the American agreements or disagreements with some nations, then what will those nations do? And whether they are the exporting nations or not exporting nations, so it will all depend upon that. lf like, say, for China, China is exporting processed goods, they do not export much polymers. And if their goods do not go there, so the people who are exporting to China some of the polymers, they may not find demand in China. They may have to sell it to the other regions in the world' So, we do not know which way trade flows will move and it will all depend upon the trade flows, the way they move ahead in the future now.

Got it, sir. sir, any outlook on the exports market, like, sir, in this fiscal FY'25, we were at somewhere around 9%. And sir, earlier we had mentioned that we are looking to increase the exports market. But for the last two years, in terms of the percentage, it has been stagnated.

Absolute value has gone up, sir. What is the outlook like, sir, we are seeing for the next 2 years in exports market? ln thecurrentfinancial year,thatisFY'26,wehopetogoupLo13%to14%of ourrevenue from exports. 13%to t4%, okay, got it. Thank you, sir. That's it from my end Thank you. The next question is from the line of Pritesh from Lucky lnvestments' Please go a head. Page 4 o'f 14

Pritesh Chheda Pritesh Chheda €) Sir, I wanted to check because of styrene drop in price and usually, styrene is stored considering the consignment size that styrene has. What kind of M-to-M. inventory loss should have flowed the P&L?

Very difficult to define any absolute numbers of the inventory loss because the orders are placed, have consignments on high seas, consignments in our stocks here' lt's a continuous flow of materials. I would not put any definite number on the inventory loss.

But it's fair to assume that the swing in per ton profitability or the swing in EBITDA for the price y-o-Y prices realization means still higher. The whole swing is to do with the styrene M- to-M?

Sorry, I could not get you. Can you repeat your question?

I am saying the swing that we see in your profitability is largely to do with the M-to-M of styrene?

No, it's not only styrene. As I said, the offtake in the season by the OEMs was also down' And with that, the margins were under pressure also because the lifting by them was low due to undue seasonal rains, their AC lifting was not there. And so in turn, our sales was down, So, all that is a combination of factors. lt's just not the styrene prices alone' This you are referring to on a Y-o-Y or on a Q-o-Q basis, all this assessment of yours? I am talking about Y-o-Y So, then the realization on a Y-o-Y basis is higher, right, for the 5% drop in volumes that you have, your realization is about 150 versus 144. So, then I could not comprehend the assessment that you are giving' What is the number of styrene you have?

From your presentation, your sales is 1,84,000. okay. Now I got it. I have done one error Okay. Understood, sir, Okay. I understood this thing. Thank you Thank you. The next question is from the line of Sailesh Raja from B&K Securities' Please go a hea d. Page 5 of 14

€) Sir, in one of our recent Linkedln post we highlighted that the development of new EPS grade, that is 300HD, specifically targeted at helmet manufacturing, So, with the government mandating two helmets per two-wheeler sold, so could you please elaborate on the opportunity size this present? Have we already started supplying EPS to helmet manufacturers or this is a new business opportunity for us?

No, we have already started. There was a grade development done. But prior to that also, we were marketing and selling our stuff to the helmet manufacturers. Only thing is that with some further improvements and some special strength has been provided in this grade, and that makes it better for the helmets. And so far, we are the only ones who are supplying to the helmet manufacturers in lndia, Okay, So, what is the volumes that we sold, sir, last year?

I would not have that number separately, please Okay. But we have 100% share? I mean, as of today, yes, Okay. Sir, as mentioned in the annual report and also -- 100% share ofthe organized sector. For unorganized sector, I am not aware ofthat, Sailesh.

Okay, As mentioned in the annual report with China achieving self-sufficiency in PS, so Asian exporters are increasingly focusing on lndia potentially creating pricing pressure' Sir, out of the total polystyrene market size of around 3.5 lakh tons, so what proportion is currently made through imports? And you mentioned in recent interview that we have increased our polystyrene exports. ls this due to soft domestic volume and pricing since exports generally have lower profitability, as you mentioned. I wanted to know why - There are two reasons. One, we have always been exporting' We have been exporting not only to the local SAARC countries, but Gulf also and Africa also, Europe also. And not today, we have been exporting for last almost now 28129 years. And now we have additional capacity after the implementation of our expansions. We had slowed down on exports, but now we will be increasing our exports also. That is what we had mentioned' And as far as the imports into lndia is concerned, lndia's total market size versus imports about j.8% to 20% of the domestic market is met by imports. Almost L8%. Out of the last year's market of I think, 330,000 tons, 340,000 tons, 60,000 tons was the imports' Page 6 of 14

,€) Okay. Sir, additionally, polystyrene operation already running at 90% utilization and with Haryana expansion still two, three years away. So, what is the road map for growth in polystyrene product? Sorry, I could not get you.

Our polystyrene operation already it is operating at 90% utilization, right, sir? No. We are operating at almost 8L%, B2%.

Okay. And Haryana expansion is still two, three years away, right, sir?

Yes, it is away. lt is still sometimes away Okay. Sir, any plans to expand polystyrene capacity in the existing facilities?

Yes. lf required, we can increase capacity here. We can do some debottlenecking there. But once we are through with our ABS, then we will consider, if required.

Okay. Sir, regarding our ABS product, so what is the structure of the technical collaboration with the Versalis? ls the technology fee a onetime arrangement or is an ongoing annual payment? No, it's a onetime fee. Okay. How much it is, sir?

I am sorry, I would not be able to tell you that, sir Okay. Sir, one last question. Sir, one of our peers, EPACK, is significantly adding capacity. So, existing line, they have a capacity ofaround 40,000 tons, and they are adding another 72,000 tons. So, in this context - Sorry, which? EPACK They are adding line for?

EpS. So, in this context, how we are preparing ourselves to derisk from potential volume and pricing pressure? when you say they have almost 40,000 tons or 48,000 tons, we have not seen any such quantity in the market. Okay may be I am not aware.. But then we are selling our quantities. PageT of 14

,o, Aditya Khetani Aditya Khetanl Okay. So, we are not seeing any volume or pricing pressure?

No, we are not seeing any threat so far to our volumes. We will maintain our volumes. Okay, thank you sir Thank you. The next question is from the line of Aditya Khetan from SMIFS Equities' Please go ahead.

Thank you, sir, for the follow-up, Sir, post this ABS' plant, our focus now shifts to the Phase 2 of ABS or we are focusing on to developing the Haryana plant now?

We will be the focus will be both the projects. The ABS here will be easy to implement' But then as far as Haryana is concerned, that focus also remains there for the North market.

Got it. Sir, on to polystyrene. So, generally, we know it is S150 to $ZOO per ton on the spreads part. So, similar, sir, how much would be ABS?

ABS? We will tellyou in the next meeting' okay, sir no worries. sir, when we talk on to the newer products, apart from ABS, so the newer products we would be developing into the Haryana plant only, Whatever the downstream, we would be making in Haryana?

Yes, they will be in Haryana, apart from ABS compounds business Got it. Sir, on to the Phase 2 ABS, earlier, sir, like in the last call you had mentioned that, that would be delayed by the one year. So, it would start technically by FY'28' Any plans, sir, so we can start the plant earlier because we have developed pnase f. So, we would be having the know-how.

We shall make efforts, but as of now it will be in FY'28 only It will be in FY'28. Okay. And sir, just on to the numbers. So, technically, so in this year, FY '26, ABS would not be contributing to EBITDA. lt would be so making loss at the EBITDA. So, how you see numbers like from the existing businesses we are expecting growth? And from the ABS EBITDA, how things would look at the number on EBITDA and on to the profitability side, sir?

As far as ABS is concerned, I would rule out that we will incur 0 EBITDA' I am confident we will certainly make some money out of it. Though it will be our first six months of operations and atthe lower capacity, new product acceptability issues, all those will come, testing/trials.

But then I am still confident that we will be earning some contribution from that business. Page 8 of 14

€) Rakesh Nayyari Got it. And sir, forthe Phase 1 ABS, we could have incurred around Rs' 600 crores in CAPEX?

Yes, that could be the number, closer to that Got it. So, sir, nothing new is lined up for FY'26 in terms of CAPEX as of now?

The ongoing expenses would be there. Some money for is Panipat, some money is for our existing complex. So, they will continue. We already said we will be spending around Rs. 200 crores, Rs. 250 crores this year, Got it. Sir, one last question. Sir, when we look at China, so they have developed the styrene monomer and the polystyrene capacities have also gone up considerably. So, comparing it with lndia, like comparing it with Supreme and other players in terms of cost structure, how you see like we can compete with them? And if suppose they offload at lower prices in the global market, how competitive we could be? And could we maintain our market share in the nea r-term?

The Chinese costs unless they are an integrated plant would not be lower, And most of their polystyrene plants are not integrated plants. And the plants which are in the inner part of China, which are not closer to the port, their freight cost itself would be so high that for them, exports would be uneconomical, Though China gives subsidies also, a lot of subsidies, but it's only that the plants which are closer to the port areas, yes, they can export. And China does a lot of processing, they do not export much polymers anywhere. They are always doing value addition by way of polymers processing.

Only difference would be that whatever they were importing earlier and from the countries like Taiwan, Korea, Thailand or wherever else they were importing it from, the exports of those very countries will go down, and those countries will look at the new locations to sell their material. I would say that the fear is not so much from China, but fear is more from the other nations who were supplying to China and now they may have to look at other territories to export.

Sir, any idea in terms of the global demand and supply? How much would be China today?

China has a capacity of close to 3 million tons of polystyrene, whereas of the total worldwide demand they are almost close to20%to25%today.

Okay. And sir, in ABS, similar, sir, how much would be the global demand and supply in ABS?

ABS also is close to, say, 12 million tons or so. lt is the current demand of ABS globally Got it. Thank you Page 9 of 14

Levin Shah Levin Shah ,€) Thank you. The next question is from the line of Levin Shah from Motilal Oswal. Please go a hea d.

Yes, hi sir. Thanks for the opportunity. I had a question on this ABS capacity. So, when is it coming on stream?

It will be in this very quarter, it will be operational shortly Okay. So, by August is when we expect the plant to commercialize? Yes, by August end may be, Sure, sure. So, for this full year, we will have around approximately 5 to 7 months of sale that will be reported for ABS, right? Yes, that's right, And post commissioning the plant, how long will it take for it to stabilize in terms of output?

Will it take a quarter, or we should build in more time before it actually normalizes?

Maybe three to six months. lt is the max we are expecting' Sure. Understood. That's it from my side. Thank you, sir Thank you. The next question is from the line of Nirav Jimudia from Anvil Wealth. Please go a head, Thanks for the opportunity. A few clarifications, Like last time you mentioned that our EPS capacity o! 24,000 tons was supposed to get commissioned by the end of this Q1 FY '26' So, where are we in terms of this capacity?

That is all also ready, but then our focus right now is on ABS and post the ABS, then this will also get commissioned.

Correct. And sir, like what we see or read around the news articles is that a lot of capacities for the petrochemicals predominantly on the cracker part in the Europe have been old and some of them are getting closed also. So, does this provide us an opportunity in terms of export volumes, both for EPS as well as polystyrene within that geography?

True, I agree. Your suggestion is perfectly right. We are also considering the European area.

We are already there. But then currently, the European PS is also available. Demand is low there. But then Europe is always on our horizon. Page 1Q o'f 14

Nirav Jimudia (6D) \2 Correct. So, this would not be only restricted to PS, right? We will be also supplying some of the EPS also out of lndia where possibly we have developed some grades, what you mentioned last time, which are very specialized grades and finds application outside lndia. We are exploring markets for that.

Correct, Sir, second is on the value-added grades, like you mentioned in an interview that this quarter, we were at 36%, but possibly on a yearly basis, we normally do 40%,45% of the volumes from the value-added grades. So, just because of the seasonal factors, what you mentioned in the opening remarks, our value-added grades to the OEs were slightly lesser.

And because of that, our value-added grade proportion was impacted. ls the right assumption? And again, we will be back to that 4o%, 45% range by the end of this year.

We have never crossed sofar 40%, We have been in the range of 35% to 40%. This quarter, we were at around 36%. And only thing is just with our ABS coming in and more of ABS compounds available to us, our value-added norms may cross 4OTo going forward, But whether it happens in the next quarter or it happens in the fourth quarter, I cannot say today, but then our target is that.

But that would be combining ABS also and not only the PS part.

ABS and ABS compounds also, we will be taking that also.

Correct. Sir, third is on the volume part, like you guided for a L2% volume growth in this financial year. So, if we just do some math, like does it also include the ABS numbers?

,€) I think this quarter, we were closer to 20%. Nirav Jimudial Correct, yes, And sir, normally, you give the breakup in terms of like within the manufacturing sales, close to around 2/3 is PS, 1/4 is EPS and rest is XPS and compounds' So, has this ratio changed this quarter? Or was it in the similar line? It continues to be the same.

Got it. Thank you so much, sir. And wish you all the best. Thank you' Thank you. The next question is from the line of Radha from B&K Securities. Please go ahead Hi, sir, Thank you for the opportunity. Sir, in continuation with your answer to the previous participant. So, if you have a one-time payment of technical fee to Versalis or ABS, so is it fair to assume that this year, the profitability will be impacted because of this?

That is a capital cost that does not impact the P&L' Okay. So, it will be depreciated over the years?

Sir, there will be some trial run costs, et cetera, because of the new capacity. So, you have guided for 12% volume growth. So, considering all the factors, do you expect the EBITDA growth to be higher than volume growth this year?

I would not make any guess on EBITDA because EBITDA is also a factor of many other things.

But I will only make a guess on the volumes and volumes will be closer to 12% growth.

Okay, sir. Sir, you have given in your presentation, you have given some ofthe presentations to state governments for using XPS insulation board. So, as on date, how many state governments have approved this product for usage in road development and building solutions? And what is their feedback? ldo not have readily any number of how many state governments because lthink almost close to L5, 16 states, if I am right, but I would not make a guess' I will ask the relevant concern people for this. I really do not have the ready answer for it.

Sir, any color on how is the feedback coming from them? ls there a pick up in product approvals from your interactions? Yes Feedback for? Page 12of 14

,O, Sir, could you name some of the key projects wherein they have used this product?

For this product sir, XPS inuslation board.

Your voice is not clear. Your feedback for?

XPS insulation board. For the product XPS insulation board.

XpS insulation board is a super product. The only issue there is that the individual houses owner, the row houses or the Bungalow or the small houses, they are the ones who are not using it, There, the sale is very minimal. But otherwise, on large institutional projects, the product is very well accepted and all the educational institutions, hospitals, hospitality, malls, they are all using our product. So, there, the sale is picking up, but then the actual sale will come from the retail and that retail because of the many things like involving extra cost, the contractor or the architects, dissuades the individual owners or either the small contractors who do not know how to install and apply these boards. Sale there has not picked up. The sale from the institutional buyers is great.

We have used it in AIMS, just to name you one. And Zozila Pass, which was a tunnel made up in the Kashmir, Ladakh sector., New parliament house used it. llT Jodhpur is a major example of it. They used it extensively and their air conditioning load has substantially come down' Okay, sir. Very good to know this. Sir, last question, your presentation talks about EPS recycling. However, I wanted to understand whetherfor PS also, post-consumer products are also recyclable.

The pS post-consumer waste is not much there. EPS goes in for packaging and extensively used all by OEM appliance manufacturers, And earlier, it was also used for disposable foodware.Visibility of the EPS post consumer wasteis very high' Whereas in the PS, the PS goes into the appliances, mainly or household goods. Packaging waste like in case of EPS is not there. Today, a refrigerator is bought and used for many years, L0 years or so in an ordinary average family or an air conditioner is used for 10 years or so. A washing machine is used for maybe 10 years again. So, the post-consumer waste actually comes more in the case of EPS.

Okay, sir. Thanks and all the best to you Thank you, As there are no further questions from participants, I now hand the conference over to the management for closing comments. Over to you, sir.

Thank to you all for participating in this earnings concall. lf you have any other further questions or would like to know more about the Company, please reach out to our lnvestor Relations Manager at Valorem Advisors. Thank you so much' Page 13 of 14

,o Thank you. On behalf of Supreme Petrochem Llmited, that conclude's this conference, Thank you forjoining us. And you may now disconnect your lines, Thank you. Page 14 of 14