Nia Jain: Ladies and gentlemen, the conference will begin shortly. Please stay connected. Thank you. Ladies and gentlemen, good day and welcome to Q2 H1 FY27 conference call of Supreme Petrochem Limited. As a reminder, all participant 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 Star then Zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Purvangi Jain from Valorem Advisors. Thank you, and over to you, Ms. Jain.
Purvangi Jain: Thank you. Good evening, everyone, and a very warm welcome to you all. My name is Purvangi Jain from Valorem Advisors, and we represent the investor relations of Supreme Petrochem Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings call for the second quarter and first half of the financial year 2027. Before we begin, let me mention a quick cautionary statement. Some of the statements mentioned in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties, which would cause actual results to differ from those anticipated. Such statements are based on management's beliefs as well as assumptions made by and information currently available to management. Audiences are therefore cautioned not to place undue reliance on these forward-looking statements in making any investment decisions.
Purvangi Jain: The purpose of today's earnings conference call is purely to educate and bring awareness about the company's fundamental business and financial performance for the quarter under review. Now, let me introduce you to the management participating with us in today's earnings call. We have with us Mr. Rakesh Nayyar, Executive Director and CFO, Mr. Dilip Deole, AVP of Finance and Accounts, and Mr. D. N. Mishra, the Company Secretary. Without any further delay, I request Mr. Nayyar to start with his opening remarks. Thank you, and over to you, sir.
Rakesh Nayyar: Thank you, Purvangi. Good evening, everyone. It's a pleasure to welcome you to the earnings conference call for the second quarter and first half of the financial year 2027. Let me brief you on the financial performance of the quarter, followed by some of the key operational highlights. On a standalone basis, operating income for the company for the second quarter stood at INR 1,957 crores against INR 1,100 crores in the corresponding quarter last year. The EBITDA increased to INR 160 crores with a margin of 8.12%. Profit after tax almost doubled to INR 95 crores. Jump in turnover is partly due to increase in volumes, and the balance is all due to increase in the selling prices consequent to increase in the raw material prices.
Rakesh Nayyar: For the first half of the financial year 2027, operating income increased to INR 3,649 crores with total EBITDA of INR 508 crores. Profit after tax grew to INR 331 crore with a PAT margin of 9.08%. On the operational front during the first half of the financial year 2027, our business navigated a challenging operating environment marked by volatility in styrene prices, disturbed supply chain, elevated ocean freight rates, and subdued export volumes. Additionally, duty-free imports of PS and ABS from ASEAN countries and China intensified competitive pressure on the domestic selling prices during the first two months of the second quarter. Our total sales volume for Q2 FY27 stood at 95,242 MT, registering a 24% year-on-year and 35% quarter-on-quarter increase.
Rakesh Nayyar: However, H1 FY27 sales volume declined 3% year-on-year to 166,085, primarily due to lower exports amid supply constraints, longer transit times, and higher freight costs. We continue to diversify our sourcing network for imported raw materials to address supply uncertainties from the Gulf region. On the growth front, our expansion plan remains on track, including the new wide width insulation board line with a capacity of 150,000 cubic meters and the expansion of compounding capacity from 50,000 tons to 80,000 tons per annum. Company continues to remain debt-free with an investable surplus of INR 886 crores as of September 2026. Our capital expenditure continued to be funded entirely through internal cash accruals, reflecting our strong financial position and disciplined capital allocation. The board has also approved an interim dividend of 125%, translating to INR 2.5 per equity share, reaffirming the company's commitment to rewarding shareholders.
Rakesh Nayyar: With this, I conclude my operating remarks. We now open the floor to the question and answer session. Thank you.
Operator: Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes on the line of Aditya Khetan with SMIFS Institutional Equities. Please go ahead.
Aditya Khetan: Thank you, sir, for the opportunity. Sir, just a couple of questions. Sir, first, good point during the quarter what we see that volumes have rebounded on quarter-on-quarter basis. Now, sir, again comparing Q2 with the current month seems like more of a distort, like current even styrene prices are again moving higher. How you see the coming trajectory moving on, like again volume could move down from the non-OEM side, so they could not absorb these higher prices. How you see, sir, things moving ahead in terms of raw material procurement, because we are not able to get supplies from Saudi. How these things will move, sir, onto the volume side and onto the raw material procurement.
Rakesh Nayyar: The currently demand, that is after the close of the last quarter till now. The domestic demand is good. Though it is a festival season, that could be also one of the reasons, but the demand so far is good. As far as the styrene prices are concerned, very difficult to predict. Styrene prices are landed price of styrene monomer today has crossed $1,600. You are right that going forward the non-OEM sector may feel the pinch. But if they do not leave the demand, it is strong, and they are able to pass it on, the demand will remain then. It is very difficult to predict, but we expect that post the American midterm elections, if the war cloud settles, things could perhaps improve from December onwards.
Aditya Khetan: Got it. Sir, onto the raw materials procurement side.
Rakesh Nayyar: Raw material we are sourcing, as far as the domestic market is concerned, we are meeting the full requirement, and we hope that we should be able to continue to do that.
Aditya Khetan: Okay. Got it, sir. Perfect. Sir, coming to the recent expansions we have outlined of ABS and for polystyrene. Sir, for ABS, December '20 is, I believe, sir, is more than some 10 years of timeline from today. So what sort of utilization for phase one we are targeting by then? Secondly, sir, for polystyrene, do we see that sort of a demand growth in India because of the single-use plastic ban and demand is over in the low mid-single digit. How you see that trajectory moving ahead, sir?
Rakesh Nayyar: As far as the polystyrene is concerned, India's appliance growth demand is good. India is also becoming a hub for exports. All the major air conditioning and the appliance guys are setting up new units, availing the benefits of PLI. So we see that going forward, and it is not that the day when we implement the project, the demand will be there, but then we have to be ready. We will be able to sell the material. Demand will be there in the next 3 to 4 years. As far as ABS is concerned, as far as our phase one, our derated capacity, we are utilizing almost 85% of that at the moment.
Aditya Khetan: 85%, sir, capacity utilization of ABS? You said that.
Rakesh Nayyar: Of the derated capacity of the ABS, because of the equipment which got back, that has still not been fully repaired and replaced. We had announced that we will be operating at 65% of our rated capacity, and of that, 85% we are utilizing currently.
Aditya Khetan: Got it, sir. My next question is on to the volume side. Sir, now what sort of volume growth we are targeting for 2027 and 2028? Adding on to this, sir, during Q2, is there any component of inventory loss? Because we see that styrene prices were lower compared to Q1. So there could be some carrying cost of inventory. Just wanted to know, have you booked all the carrying inventory or they are still in the pipeline?
Rakesh Nayyar: There is no such thing that book the inventory or we carrying the inventory. We have all the SAP systems and automatically the valuations happens, keeps on happening on the moving average basis. Yes, as far as the market price is concerned, compared to Europe prices, the issues do come in. I wouldn't call that any inventory loss or something. That is all part of the big game because when the volatility is there, these things are always happening. That all is accounted for.
Aditya Khetan: Onto the volume growth number, sir.
Rakesh Nayyar: Volume growth, if everything is normal post the midterm elections in US, everything falls in place, then yes, we would be doing better than last year, though exports have been down till now. But overall, we will be doing better than last year then.
Aditya Khetan: Okay. Got it. Thank you, sir. That's it from my side.
Operator: Thank you. Next question comes from the line of Nirav Jimudia with Anvil Wealth. Please go ahead.
Nirav Jimudia: Yes, sir, thanks for the opportunity. Two questions. Sir, first is on the compound side, we are already at 50,000 tons and another 30,000 tons is going to come up by September 2027, plus the Xmold. Just wanted to understand from you, in terms of application-wise and not from the customer side, because there could be limited customers, but the application could be multi-fold. So where are we currently in terms of the application-wise approvals from the customer, and what could be the scope of growth for us so far as those application bandwidth is concerned?
Rakesh Nayyar: We are targeting all applications, including the auto components. We are already there in the battery segment. We are there in all the appliances also. Not that we are only targeting any particular segment. We are targeting all applications. As far as the growth is concerned, yes, we are focusing right now more on the ABS side. I am happy to say that, yes, our acceptability of our compounded material for the ABS has been good so far. We continue to focus on that.
Nirav Jimudia: Correct. Sir, just wanted to continue here, if you can share your thought process in terms of, let us say, when the equipment would be repaired and back to normalcy for our mass ABS, plus the newer ABS line, which we are currently building on. So let us say from the first phase of 70,000 tons, whenever it is utilized optimally, how do we see our own consumption of ABS or mass ABS into the compounds and how much we intend to sell the mass ABS in the outside market also? When can we feel that this 80,000 tons of compounding facility could achieve the maximum utilization?
Rakesh Nayyar: The 80,000 tons would be implemented by sometime in the Q3 of FY 2028.
Nirav Jimudia: Okay.
Rakesh Nayyar: That is the schedule right now. We would be certainly doing the compoundings of the other polymers also there, which we were earlier doing. Our own second line of ABS should be ready by December, again the Q3 of FY 2029. I see that this whole capacity would be fully utilized in the financial year 2029, 2030 then.
Nirav Jimudia: Got it. Sir, last question from my side. Sir, considering the current geopolitical crisis we currently seeing on, do we sense any structural opportunity for us in terms of exports of our products into Asia as well as in Europe, given the kind of disruptions in terms of the capacities or closing downs of capacities, what we are currently witnessing there? If you can share your thoughts, sir.
Rakesh Nayyar: The opportunities do arise off and on, but the issue is that when you get the order, we still add, and the time gap between the receipt of order and financial closures of the order to the shipment. In that interim, what happens to the raw material price today and to the freight rates? The ocean freight rates have shot up so high. The order taken is 3 weeks back, and by the time you want to ship, the freight rates have gone up by $2,000 in the interim also. Those issues still continue to linger unless we export on an FOB basis and the freight cost to the buyers.
Nirav Jimudia: Right.
Rakesh Nayyar: The raw material prices have to be firmed up then. The opportunities are always there. Considering the current volatile environment, it is very difficult to on a regular basis and cash those opportunities at the moment.
Nirav Jimudia: Got it. And sir, just a bookkeeping question. What was our trading sales for Q2?
Rakesh Nayyar: Around 22%.
Nirav Jimudia: Fine, sir. Thank you so much, and wish you all the best.
Operator: Thank you. Next question comes from the line of Sailesh Raja with 360 ONE Capital Market. Please go ahead.
Sailesh Raja: Yeah, thanks for the opportunity, sir. Sir, as mentioned in our presentation, in H1 FY27, the net sale volume of PS and ABS, inter-segment transfer I am talking to SPC and XPS insulation board division. That volume we have given 11,700 MT as compared to last year of 4,300 MT in H1. Based on my calculation, the corresponding full year volume itself last year it was only 11,000, roughly. That we have crossed in H1 itself. Could you help us understand the key drivers of this significant increase? Has the growth been predominantly driven by these ABS based compounds? As you mentioned, it is 85% utilization level. Or we have seen a good growth in the XPS insulation board also.
Rakesh Nayyar: XPS insulation board, you see, during the lean months of the monsoons are always low. This growth has mainly come from our compounding businesses and for polystyrene and ABS. You are right that if I add that 11,400 tons to our overall volumes, we have already surpassed. If you look at the net sales to the market, the volumes are down by 2.8%. But considering these volumes which are used internally, our capacity utilization also goes up and our volumes have actually been more than the last year.
Sailesh Raja: Yeah. Yes, sir. Mm-hmm. If the pass-through is better in compounds, sir, compared to the ABS?
Rakesh Nayyar: Sorry, I couldn't get you.
Sailesh Raja: No, compared to ABS, the ABS compounds raw material pass-through is much better.
Rakesh Nayyar: Yeah, certainly, yes. That's right.
Sailesh Raja: Yes, sir. Sir, currently our end market mix is roughly around 40% is consumer durable, 30% is packaging, and 30% is stationary related products. As we ramp up phase one and phase two of ABS, as Mr. Nirav also was asking this. Out of fully utilizing 1.4 lakh tons of ABS, what could be the mix? How the mix will change, how much will be automotive and how much will be electronics, like mobiles, telecommunication equipment products. How the mix will change?
Rakesh Nayyar: See, right now we have only entered the auto components. I can't really predict that at all, how things will shape up, but we have entered the auto components. We are now targeting next stage, supplying to the electric mobility of two-wheelers. We have got certain acceptance also from the two-wheeler segment. That is initial stages. We have to still work on that. Once we have the full production capacity available with us in the phase one, that really will kick off then for us. Going forward, once the 140,000 tons is in place, the mix could change. Primarily it will be the appliances and autos then.
Sailesh Raja: Okay.
Rakesh Nayyar: And autos includes batteries also.
Sailesh Raja: Yes, sir. One last question, sir. Our inventory has increased by approximately 50%. Could you provide the breakup, sir, between the raw material and finished goods inventory breakup?
Rakesh Nayyar: It is mainly the raw material because the raw material prices have almost doubled than the last year, what you are comparing with.
Sailesh Raja: Yes, sir. Right. Okay.
Rakesh Nayyar: INR 900, INR 950 to INR 6,050 is the price today.
Sailesh Raja: Yes, sir. So that will be fully consumed now, sir, this month? That increased raw material price.
Rakesh Nayyar: Sorry?
Sailesh Raja: That increased raw material that we have.
Rakesh Nayyar: Yeah
Sailesh Raja: That will be entirely consumed in October month, right, sir?
Rakesh Nayyar: It is. Because it also includes the material in transit.
Sailesh Raja: Okay.
Rakesh Nayyar: As in material which is on the high seas also is part of it. It is because it is a sale on a CIF basis, so the moment it is loaded on the ship, the risk is ours. So it is always considered as our material. So part of this is in transit also.
Rakesh Nayyar: As and when it arrives at the end of this month, it will get used in the next month then. So it is a cycle. It will keep on going.
Sailesh Raja: Yeah. Okay, sir. Thank you, sir. Thanks. Yeah.
Operator: Thank you. A reminder to all the participants that you may press star and 1 to ask a question. Next question comes from the line of Rahul Agarwal with Ikigai Asset. Please go ahead.
Rahul Agarwal: Yeah. Hi, sir. Very good evening. Sir, firstly, to start with on the spreads. How should we think about GPPS and HIPS spreads? If you could just give some indication of how was it in Q2, how do you look at Q3 and Q4, just approximate outlook.
Rakesh Nayyar: Can you repeat your question, please? Hello?
Rahul Agarwal: Am I audible, sir?
Rakesh Nayyar: Hello. Yeah. In between your voice is breaking. Can you repeat your question?
Rahul Agarwal: Sir, I was asking some comments on the spreads for polystyrene and ABS, GPPS, HIPS.
Rakesh Nayyar: Okay. The spreads are not steady because of the raw material prices and the freight rates. The differential in the freight rates of the containerized cargo versus the liquid bulk cargo. The liquid bulk cargo freight rates have also gone up. In between, the freight rates have caused the deltas to shrink, and the spread between the raw material prices of styrene monomer versus the finished product landed in India, that has shrunk.
Rahul Agarwal: Sir, could you comment what did we experience in Q2 in terms of spreads for GPPS and HIPS?
Rakesh Nayyar: It is around $200, $250, $200 more so after taking all the freight rate costs and everything. It is at $200 to $250, depending upon the week and the day and the month in this quarter. GPPS and HIPS has been between $300 to $350.
Rahul Agarwal: Got it, sir. Secondly, sir, on the imports, after you all just mentioned that once this entire duty benefit is now no more applicable, has the imports started coming down? Just some comments on monthly run rates of imports for polystyrene and ABS right now.
Rakesh Nayyar: You see, the monthly imports are coming, but then, you see, in the month of May, June, July, the imports this year have been higher than the imports made last year. That is because it was a duty-free imports. Come August, the imports have marginally come down as compared to the last year, but the imports continue. Also, maybe the reason of imports coming down is the non-availability of material. Because all building blocks are in short supply because of the Gulf. Similarly, from Gulf, no polymers are also coming. So that could be also one of the reasons. August has seen a little dip in the imports.
Rahul Agarwal: Got it, sir. My understanding is polystyrene, India imports about 80,000 tons, and ABS is about, let us say, somewhere between 130,000, 140,000 tons. Is that number going to be similar this year?
Rakesh Nayyar: This year it could be lower, but as far as ABS is concerned, it will be almost similar. Maybe polystyrene may be a little less. But during that period of May, June, July, substantial quantities have come in. Maybe at the end of the year, when we see in totality, it could be similar numbers.
Rahul Agarwal: Got it, sir. Because there is some domestic capacity, like you are also selling mass ABS. There is another new capacity which is coming up from other competition. So imports ideally should fall down, right? At least on the ABS side.
Rakesh Nayyar: But then the demand is also growing. Marginally, demand is also growing there.
Rahul Agarwal: Right. Okay. On that-
Rakesh Nayyar: Because the capacities you are talking about are still not operational. They are still in pipeline, and they would be perhaps operational, I do not know, which quarter of this financial year. Very difficult to comment on that.
Rahul Agarwal: Got it, sir. Last question, sir, on polystyrene. For fiscal 2027, 2028, what is the quantity of polystyrene we sell in India? ABS, you mentioned you are working with 85% or 65%, which basically implies that about 40,000 tons of ABS is what you should sell in the full year. If you just-
Rakesh Nayyar: Yeah
Rahul Agarwal: confirm that number.
Rakesh Nayyar: So far, this is the number I have. As far as 2027, 2028, you are saying polystyrene is concerned, Indian demand of polystyrene should be upwards of around 375,000 tons or so.
Rahul Agarwal: How much do we sell, sir, on an annual basis, polystyrene in India?
Rakesh Nayyar: We have a market share of around 60%.
Rahul Agarwal: Got it, Rakeshji. Thank you so much for answering my questions. I will get back in the queue, and festive greetings to you and the team. Thank you.
Operator: Thank you. Next question comes from the line of Santhosh Kesari with SKK HUF. Please go ahead.
Santosh Keshri: Hello. Am I audible, sir?
Rakesh Nayyar: Yeah.
Santosh Keshri: Yeah. Sir, I wanted to ask you that in this quarter, we had a very good profit. Compared to the last quarter, the profit was down actually, but year-on-year, the profit growth was great. You may have answered this, but I just joined the call late. I just want to know how do you see the quarters coming forward? Going forward, how do you see the EBITDA profits growth? Is it going to continue at the same trend or depending on the availability of the raw material, the profit is going to normalize just like last year?
Rakesh Nayyar: I don't have a crystal ball with me right now. In the changing global environment and these current geopolitical conditions, it is very difficult to project. I only said, I think before you joined, that the month of October, so far the demand in October has been good, and that could be possible because of the festivities now. But demand is good in the month of October. Going forward, how things shape up post-midterm elections in the US, whether the war clouds settle down, things improve, raw material availability eases, yes, then everything is fine. Otherwise, if that doesn't happen, the raw material constraints continue, then it is very difficult to project.
Santosh Keshri: Okay, I get it, sir. The thing is that, in the first quarter, as you mentioned earlier, the government allowed import of raw material with much less or even no import duty.
Rakesh Nayyar: Yes.
Santosh Keshri: How do you see it going forward in terms of the domestic buyer, having seen the availability of the raw material and also have seen the supplies from outside India? Do you feel that it has affected the competitive position of the industry, the domestic industry, in some way? Because the domestic buyers would have seen the test of the material from outside, and the material that we got is in good supply, good quantity. There would be higher import compared to the previous years.
Rakesh Nayyar: See, that imports came in in the month of May, June, July, because the Government of India announced in the first week of April, the duty exemption for all polymers. When you are getting something without duty, naturally the trading community or the end users are tempted to go and look for cheaper material, which they got at that point of time. Otherwise, in any case, the imported material was always coming into the country. It was nothing new. There is a competition, global competition. India is a big market. But the spike in imports during those 2, 3 months was because of the duty exemption. Having the exemption withdrawn in the month of July, the imports have fallen back to the normal levels or lower than the normal levels. As the numbers have come for August, the imports are less than the last year's imports.
Rakesh Nayyar: Testing of imported material or sourcing of imported material is nothing new for the Indian users. They have been doing it for years. It is an opportunity available which everybody wanted to go and utilize the same.
Santosh Keshri: Okay. Thank you so much. Thank you for answering my question.
Operator: Thank you. Next question comes from the line of Ansh Khimawat with Capital One. Please go ahead.
Ansh Khimavt: Hello. Am I audible, sir?
Rakesh Nayyar: Yeah.
Ansh Khimavt: Yeah, sir. Congratulations on the great set of numbers, and thank you for taking my question. Sir, in the previous call, in the Q1 call, you had mentioned that we had witnessed some impact on demand from the non-OEM segment. Can you just comment as to how that has been this quarter?
Rakesh Nayyar: That is visible from the numbers, Ansh, because the first quarter, the non-OEM market was not there. Now as I see it, because the imports were big, coming as duty-free imports were there, so maybe they could have sourced it or imported the material. But in the second quarter, the non-OEM segment is back into the market. The demand is good from them also. So it is OEM and non-OEM, both have been good in the second quarter.
Ansh Khimavt: Could you please bifurcate as to what kind of volume you do for OEM versus non-OEM?
Rakesh Nayyar: They are almost same, 50/50.
Ansh Khimavt: Okay, sir. Okay, sir, that is it from my side. Thank you.
Rakesh Nayyar: Thank you.
Operator: Thank you. Next question comes from the line of Nia Jain, an individual investor. Please go ahead.
Nia Jain: The export volumes were impacted by the limited styrene monomer availability, and also higher ocean freight rates. As the alternative sourcing arrangements are established, how quickly can we expect our exports to recover, and what could this mean for our realization?
Rakesh Nayyar: Well, we need to have the alternate sources supplied to cover exports also. In current scenario, with the raw material prices so high, volatile freight rates, volatile raw material prices, the spiked ocean freights, and the time difference between the order and the shipment of exports are something difficult to do. But once everything is back to normal, restarting exports is not difficult for us, because we continue to engage with our customers in all the markets at all the times, and they all appreciate the issues at the moment. Exports, once the markets are normal, raw material supplies are back to normal, we would recommence the exports in the normal way.
Nia Jain: Thanks for that. I have one last question from my side. With supplies from the Gulf region being disrupted, the company is exploring alternative sources for importing these raw materials. How do the costs and availability of these supplies compare with our traditional sourcing, and what could be the impact on our margin?
Rakesh Nayyar: The raw material prices in general, because of the absence of the material coming in from West Asia, which has been the major source of supply of energy to all the other manufacturers also. The raw material prices have gone up. The raw material price, which used to be in the region of $900 to $1,000, is closer to $1,600 to $1,650 today. As far as the margins are concerned, these are all passed through. There could be a time lag for passing on, but then it is all passed on.
Nia Jain: Okay. Got it. Thank you.
Rakesh Nayyar: Thank you.
Operator: Thank you. Next question comes on the line of Shlok Singhvi, an individual investor. Please go ahead.
Shlok Singhvi: Thank you for this opportunity. I would like to ask, as I have known, styrene prices have continued to remain volatile during the quarter. I just want to know how the styrene monomer to polystyrene spread evolved compared to Q1 FY27, and what you are seeing in terms of the current spreads?
Rakesh Nayyar: The spreads in Q2 are the current spreads. For GP, they continue to be around $200 to $250, or for HIPS, around $300. They remain there.
Shlok Singhvi: Okay. One last question from my side. With the new wide width XPS insulation board line and with a capacity of 150,000 cubic meters, which is progressing as planned, what is the commercial production to be expected to spend, and what is the demand outlook for that with your additional capacity? Sorry.
Rakesh Nayyar: Commercial production will start in the first quarter of FY28, 2027/2028, and the capacity would be ramped up over a period of time. We expect that the full capacity of 150,000 cubic meters should be able to go to the market and absorbed in the market in the next 24 to 30 months.
Shlok Singhvi: Okay. Thank you so much for that.
Operator: Thank you. Next question comes from the line of Nirav Jimudia with Anvil Wealth. Please go ahead.
Nirav Jimudia: Sir, thanks for the opportunity again. Sir, just wanted to understand, with all these problems of availability of raw material, higher energy cost, have we seen the plant closures in Europe where probably their costs have gone up due to rising gas costs on which they are currently relied on, plus the increased imports of the material from China. They have been facing troubles in terms of operating their plants. Could structurally provide us an opportunity in terms of making inroads into European market, particularly from the EPS side? If you can just help us understand.
Rakesh Nayyar: Very frankly, I have not heard of any. We heard that some reorganization, restructuring is planned, but nothing has been seen so far. People have reduced their operating rates, but closure of any plant, I have not heard.
Nirav Jimudia: Okay. And sir, from the EPS point of view today, we are now at 145,000 tons of capacity spread between both the locations. How have we seen the demand of EPS in India in this first 6 months? How we see the demand over the next 6 months? If you can just share your views.
Rakesh Nayyar: EPS demand is good so far in India. We look at it that in the current year, the total demand for EPS could be in the region of 165,000 to 170,000 tons in the country.
Nirav Jimudia: Okay. And safe to assume that our market share would be above 70% for this?
Rakesh Nayyar: No, I wouldn't say that. It will be lower than that.
Nirav Jimudia: Correct. And sir, any newer applications have come up on the EPS side, which probably would be driving the growth over the next two, three years?
Rakesh Nayyar: No, not in the recent past. Nothing.
Nirav Jimudia: Got it. Thank you so much.
Operator: Thank you. Next question comes from the line of Rakesh Naik, individual investor. Please go ahead.
Rakesh Naik: Hello, am I audible?
Rakesh Nayyar: Yeah.
Rakesh Naik: Yes, sir. Congratulations on a good set of numbers. I just wanted to ask, what has the Xmold's growth been like, do you have any plans for any inorganic growth apart from Xmold?
Rakesh Nayyar: At the moment, for inorganic growth, no. We are not looking at any other. No.
Rakesh Naik: Rishi, sir, what has the Xmold's growth been like?
Rakesh Nayyar: Xmold is doing good. Xmold's numbers you must have seen. Compared to the last quarter or the year-on-year quarters, their numbers have almost doubled. We have been able to streamline their operations. We have been able to bring in more credit discipline and that has resulted in our better margins there. We have been able to change the product profile also. The margins have improved there.
Rakesh Naik: Okay. Thank you so much. Another question, from the capital allocation plans, what would be the most capital intensive? Hello?
Rakesh Nayyar: Hello. ABS is the most capital intensive.
Rakesh Naik: ABS? Okay. Thank you so much. That is from my side.
Operator: Thank you. The next question comes from the line of Aditya Khetan with SMIFS Institutional Equities. Please go ahead.
Aditya Khetan: Thank you, sir, for the follow-up. Sir, my first question is on to the EPS side. Sir, possible to quantify the raw material price of EPS, which is pentane gas. Currently, how has been the trend over the last three to four months?
Rakesh Nayyar: Aditya, all raw material prices have increased, there is no decrease yet. They have inched up, gone up. But then yes, pentane is also available locally now. So the impact of styrene monomer is the maximum because 92% of the raw material of EPS is styrene monomer.
Aditya Khetan: Okay. Got you. And sir, my second question is, like you had already mentioned, on to the speciality side, we earlier used to state some 30% to 35% of the overall mix is from speciality. Now with the expansion into speciality, polystyrene-
Rakesh Nayyar: Yeah
Aditya Khetan: how that mix will go?
Rakesh Nayyar: Yeah, we have the expanded and we increased the volumes. We are still at around 40%.
Aditya Khetan: 40%, okay. Okay, sir. Got it. Thank you.
Operator: Thank you. Ladies and gentlemen, as there are no further questions, we have reached the end of question and answer session. I now hand the conference over to the management for closing comments.
Rakesh Nayyar: Thank you all for participating in this earnings con call. If you have any further questions or would like to know more about the company, please reach out to our Investor Relations Manager at Valorem Advisors. Thank you.
Operator: Thank you. On behalf of Supreme Petrochem Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.
