Earnings Call Transcript Analysis Report #
Financial Performance #
Key Metrics #
- Q3 FY25: Operating Income: Rs. 1,405 crore; EBITDA: Rs. 116.70 crore; PAT: Rs. 71 crore (implied from 5.08% margin); PAT Margin: 5.08%.
- 9M FY25: Revenue: Rs. 4,484 crore; EBITDA: Rs. 443 crore; EBITDA Margin: 9.87%; PAT: Rs. 284 crore; PAT Margin: 6.32%.
Comparisons #
- Q3 PAT grew 5.5% YoY.
- 9M PAT increased approx. 32% YoY.
- Q3 Sales Volume (manufactured products) increased 21.1% YoY.
- 9M Sales Volume (manufactured products) increased 13.7% YoY.
- Gross and operating spreads per tonne saw compression in Q3 due to declining styrene monomer prices impacting margins due to the lag between procurement and sales.
- Spot Polystyrene/Styrene spreads mentioned at $200-$250/tonne, but realized margins are impacted by older, higher-cost inventory.
Guidance/Forecasts #
- Maintains guidance for ~8% volume growth for the full FY25, targeting ~350,000 tonnes (vs 325,000 tonnes in FY24).
- Expects Q4 FY25 volumes to be similar to Q4 FY24 (~96,000 tonnes), implying lower YoY growth in Q4 compared to previous quarters, potentially due to lower exports.
- Expects similar volume growth (~7-8%) in FY26, excluding the new ABS volumes.
Areas of Growth/Decline #
- Strong volume growth across segments in 9M FY25.
- Margin compression in Q3 due to raw material price dynamics.
- Company remains debt-free with an investible surplus of Rs. 680 crore as of Dec 2024.
Strategic Initiatives & Business Updates #
Mass ABS Project (Phase 1) #
- Capacity: 70,000 TPA.
- Timeline: Mechanical completion expected by end-March 2025, commissioning scheduled for Q1 FY26.
- Market Readiness: Discussions with potential customers ongoing with collaborator (Versalis) support. Confident in selling the product comfortably post-launch. Sampling will begin post-commissioning.
Mass ABS Project (Phase 2) #
- Timeline: Hope to start implementation in the coming financial year (FY26). Capacity likely similar to Phase 1.
Haryana Plant Expansion #
- CapEx: Estimated INR 800 crore.
- Timeline: Pre-project activities started. Project implementation at the site expected to begin towards Q3 FY26.
- Product Mix: Polystyrene (100k TPA), Expandable Polystyrene (EPS) (50k TPA), Extruded Polystyrene (XPS) (100k cubic meters), EPS 3D Panels (1 million sq meters), Polystyrene & ABS Sheeting.
- PS/EPS timing linked to IOC’s styrene monomer project implementation.
- Expected Financials: Asset turnover projected at ~2.5x with a better margin profile due to value-added downstream products.
XPS (Extruded Polystyrene) #
- Capacity expansion of 1 lakh cubic meters planned (timing mentioned as Q1 FY26 alongside ABS commissioning or soon after).
- Current sales (~Rs 50 crore) indicate underutilization.