Styrenix Performance Materials reported its Q3 FY26 standalone results, showing Total Income at INR648.8 crores (a 6.2% dip YoY). Standalone EBITDA saw marginal growth of 0.4% to INR75.7 crores, with margins improving by 800 basis points to 11.7%. Management also addressed inventory adjustments related to the Thailand subsidiary and detailed the path forward for the ABS capacity expansion in India.
Q3 FY26 Standalone Financial Performance
Bhupesh Porwal commenced the call by highlighting an estimated incremental impact of INR2.24 crores for gratuity liability and INR0.86 crores for leave encashment due to the new labor code implementation.
Key standalone quarterly highlights for Q3 FY26 compared to Q3 FY25:
- Total Income stood at INR648.8 crores (a 6.2% YoY dip).
- EBITDA increased marginally to INR75.7 crores (0.4% YoY growth).
- EBITDA margins improved to 11.7% from 10.9% (an 800 basis point increase).
- Profit After Tax (PAT) was INR44.3 crores (a 7.51% YoY dip).
- Sales volume grew by 7.6% YoY to 51.1 KT.
Consolidated Q3 Performance and Thailand Business Context
On a consolidated basis, the performance reflects the acquisition of Styrenix Performance Materials Thailand Limited in January 2025.
- Consolidated sales volume (India + Thailand) was 66 KT.
- Management noted that lower prices for final products and raw materials led to inventory losses in the Thailand business, which was built up during the transition phase to new brands (Absolac and Absolan).
9-Month Performance Summary
The 9-month standalone performance showed a volume increase, while margins compressed:
- Standalone Total Income: INR1,988 crores vs. INR2,052 crores.
- Standalone EBITDA margin: 12.3% vs. 13.3%.
- Standalone Sales Volume: 147.5 KT, showing a 7.4% YoY growth.
Capacity Expansion and Polystyrene Outlook
Rahul Agrawal provided updates on capacity enhancements:
- The polystyrene capacity expansion from 65,000 tons to 100,000 tons was primarily driven by increasing General Purpose Polystyrene (GPPS) volumes.
- The company is on track for Phase 1 of the ABS expansion (50,000 tons), slated to start in the second half of FY ’27.
- While ABS demand in India remains strong, the overall 12.5% volume growth guidance for the year is expected to be slightly lower due to sluggish growth in the Polystyrene segment.
Pricing and Customer Contracts
Regarding pricing structure, management confirmed that the majority of the ABS business is tied to long-term agreements.
- For ABS, management estimates that more than 70% of the business operates on a formula-based pricing model.
- For Polystyrene (PS), formula pricing is restricted primarily to the OEM segment, covering about 50% of that business.
- Thailand operations are overwhelmingly formula-based, with very little exposure to spot pricing.
Thailand Plant Strategy
The lower utilization at the Thailand plant is attributed primarily to the mandatory validation process required for the new brand (Absolac/Absolan) with customers, which can take significant time, especially in high-tech segments like automotive (up to 18 months). While the product itself is excellent, gaining brand acceptance is a phased process. Management stated that more than 75% of the reported inventory losses were due to valuation adjustments following realized sales at lower market prices.
Source: BSE
