Supreme Petrochem holds up on account of future growth, amid market sell-off

Supreme Petrochem holds up on account of future growth, amid market sell-off

by 5paisa Research Team Last Updated: Dec 11, 2022 - 04:36 pm 40k Views
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Supreme Petrochem (SPL)announced on Monday to have undertaken a project for the manufacture of Mass Acrylonitrile Butadiene Styrene (mABS) at village Amdoshi-Wangani, in Raigad, Maharashtra, with two Lines of 70 KTA each aggregating 140 KTA. Line I is scheduled to go on stream by June 2024 and Line II is planned for completion by March 2025. The Company has already entered into an agreement for License and Basic Engineering Design for Line I of 70 KTA with Vesralis-Eni Chemicals Group. The addition of Versalis' proprietary mass ABS technology will expand Supreme Petrochem's leadership position in Styrenics polymers in India. The total project cost for both Lines shall be funded from the company's funds.

SPL is enhancing its PS (Polystyrene) and EPS (Expandable Polystyrene) production with a capacity of 120,000 MTA, which are progressing as expected and will be commissioned in phases between March 2022 and May 2022. With enhanced capacity and healthy demand from end-user industries (OEM and Appliances), SPL will witness strong growth in the future.

The company has shown strong growth in its top line for Q3 FY21-22, it recorded income from operations at Rs 1294.08 crore in Q3FY22 which is an increase of 39.33 per cent YoY. On a QoQ basis, the revenue was also up by 8.81 per cent. The EBIDTA of the company de-grew by 6.32 per cent on YoY and but improved by 27.39 per cent on QoQ at Rs 224.22 crore. The company reported PAT of Rs 164.54 crore as against Rs 171.52 crore a year ago, which is a decline of 4.07 per cent. The margins continued to decline due to higher production costs. Both EBITDA and PAT margins shrunk by 844 bps and 575 bps and stood at 17.30 per cent and 12.70 per cent respectively. The margins however showed improvement on a sequential basis with a gain of 252bps and 203bps, respectively.

Supreme Petrochem is a joint venture between Supreme Industries Ltd and the Rajan Raheja Group. SPL is the leader in the Polystyrene business in the Indian market with a share of more than 50%.

While the market saw a sharp meltdown as sell-off sentiment prevailed, Shares of Supreme Petrochem opened on a positive note and touched a day’s high of Rs 724.40 and is currently trading at Rs 697.45 a piece at 2.30 pm with a loss of 0.5%.

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