Thank you very much. Namaste everyone and a warm welcome to our Q3 and 9 months FY '26 earnings call.

Before turning to the financial performance, I would like to highlight for the quarter gone by that pursuant to the implementation of new labor code and based on information currently available, the group has estimated and accounted for incremental impact on consolidated financial results amounting to INR 2.24 crores of gratuity liability and INR 0.86 crores of compensation towards leave encashment arising primarily due to change in wage definition. Coming to our standard call it quarterly financial highlights, total income of Q3 FY '26 stood at INR 648.8 crores versus INR 692.2 crores in Q3 FY '25, showing a dip of 6.2% on year-on-year basis.

EBITDA for quarter three FY '26 stood at INR 75.7 crores versus INR 75.4 crores in Q3 FY '25, showing a marginal growth of 0.4% on YoY basis. EBITDA margins for quarter three financial year '26 improved to 11.7% versus 10.9% in Q3 FY '25, showing an increase in 800 basis points.

Profit after tax for Q3 FY '26 stood at INR 44.3 crores versus INR 47.9 crores in Q3 FY '25, showing a dip of 7.51% on year-on-year basis, and profit after tax margins for Q3 FY '26 stood at 6.8% versus 6.9% in Q3 FY '25, a dip of 100 basis points. Sales volume for Q3 FY '26 stood at 51.1 KT versus 47.5 KT in Q3 FY '25, thereby showing a growth of 7.6% on year-on-year basis.

Coming to our consolidated quarterly financial highlights, total income for Q3 FY '26 stood at INR 871.3 crores. EBITDA for Q3 FY '26 stood at INR 43.5 crores, and EBITDA margins stood at 5%.

Profit after tax stood at 16.3 crores, and profit after tax margins stood at 1.9%. Consolidated sales volume, which includes both India and Thailand, for Q3 FY '26 stood at 66 KT.

On Thailand business, we built inventory during the first half of the year in face of transition to our Absolac and Absolan brand for ABS and SAN, respectively. However, as prices for both final products and raw materials have been considerably lower during the last few months, we witnessed some inventory losses on account of the same.

I would like to reiterate that the group had acquired Styrenix Performance Materials Thailand Limited in January '25, and the consolidated results for the year ended 31st March '25 and the period ended 31st December '25 include financial results of the subsidiaries. Therefore, the financial results of Q3 FY '25 and 9 months FY '25 are not comparable with the corresponding consolidated figures.

Now coming to the 9 months performance highlights on a standalone basis, total income stood at 1,988 crores versus 2,052 crores. EBITDA in 9 months stood at 243.6 crores with 12.3% margin versus 272.8 crores with 13.3% margins.

PAT in 9 months stood at INR 150 crores with 7.5% margin versus 179 crores with 8.7% margins. Sales volume for 9 months FY '26 stood at 147.5 KT versus 137.4 KT, therefore showing a growth of 7.4% on year-on-year basis.

On a consolidated basis, total income stood at 2,619 crores. EBITDA for 9 months was 231.8 crores, and EBITDA was 8.8%.

Profit after tax for the 9 months on a consolidated basis stood at 109.4 crores, and profit after tax margins for 9 months FY '26 stood at 4.2%. Consolidated sales volume, which includes both India and Thailand, for 9 months FY '26 stood at 190.7 KT.

With this, I conclude the financial highlights, and we

Thank you, sir, for the opportunity. Sir, just a couple of questions.

Sir, in your presentation, sir, you had mentioned in Thailand we had build up some inventory during the first half of the year. Considering sir last year first half, when we talk about Q1 and Q2, we were also building up inventories and that has been recorded in Q3.

Is this the correct understanding? Second, you have also mentioned in the face of changeover from ABS and SAN of the previous organization.

Whatever grade INEOS was making, you have changed it to your Absolac and Absolan grade. What is the difference?

Have you changed the product itself only from ABS what INEOS was making, now you're making a newer ABS? Or only the name has changed earlier whatever name was there in INEOS, now you have changed it to your Absolac and Absolan?

In view of this, how this stock build-up has happened? Only name has changed or what has changed actually?

If you can give some more a bit detail on this, sir.

Aditya, thank you for your question. This is Rahul.

With regards to inventory build-up, we took over management control in January of '25. We started producing in the plant for two reasons: one, we had the possibility to produce under the existing brand, which was the earlier company's brand name, of Novodur and Lustran, where they used to sell ABS and SAN under those brands in their target markets.

We had an understanding whereby we could produce under those brands for a specific period of time, and then we had to then potentially sell that brand after that time expired. Now, most of the sales from Thailand take place in all over Asia.

The product, the way it works is there is a validation process specifically in the specialty ABS business, which I have mentioned earlier calls as well, whereby the brand, the product, the specifications, all of it is validated and registered with the end customer. This is kind of what has been happening in this business for many years and will continue to do so.

Accordingly, the earlier brand was registered and approved, and we had the possibility to produce and stock up on it while knowing that we would have to shift from that brand to our own brand, which is Absolac and Absolan. We used that interim period to build up that stock because, as in some cases, the validations or approvals take a little bit longer.

We still were able to get the approvals and validations in a relatively quick period of time. All the inventory that we generated or additional inventory that we built up was recorded in the corresponding quarter itself.

Whether it was Q4 of last financial year or Q1 and Q2 of this financial year, all those production numbers and their corresponding inventory build-ups would have kind of correlated with that itself. There is no as such recording of that inventory in the following quarter.

It would have been in the respective quarter where the production would have taken place. Also, we wanted to test the productivity of the plant and to ensure that the plant is able to give the desired output whenever we are able to ramp up the sales, which also is something which was required to be done.

While there was a comprehensive study and understanding of the equipment, it was still very much important to test it. I think that is also something that we successfully were able to do.

Essentially, there is no difference in the two products other than the brand. As you already correctly asked, when we go from a specific product grade for a specific application which was running under the earlier brand name to our brand name, everything would be the same except for the brand name itself.

The product, the specification, the formulations, the machines used to produce it, the raw materials, all of it was essentially the same. In any qualification process, the brand itself also has to be approved.

In some cases, we were able to move very quickly. In some cases, it took a little bit of time and which we were anticipating.

That fortunately has been done. I would say 90% of the customers have been retained which were there in Thailand and we are now selling under our new brand name or our global brand name, if you will, which is Absolac and Absolan.

I hope that answers your question.

Got it, sir. Thank you for that.

Sir, my second question, as you mentioned, it was a one-time adjustment and now most of the customers have retained. What would be the inventory adjustment figure first?

Second, sir, you have also mentioned there have been some inventory losses. If considering sir 75 crore standalone EBITDA, adjusting for that inventory losses, how much EBITDA we could have seen in that business?

Third, sir, when we look at the footnotes of your financial results, in Thailand, when we look at the revenue, it is stated at 256 crore and some 39 crore loss in your footnotes. When we do a simple consol minus standalone, that figure looks lower at 221 crore revenue and some 25 crore loss.

Ideally, sir, what we are missing over here? We should directly do consol minus standalone, that is the correct, or what you mentioned in your footnotes, that is the correct one?

Right. Aditya, answering your second part, there are some intercompany transactions also which has to be eliminated for the consolidation.

We buy rubber from Thailand, or Thailand buys AMSAN from us. Those all sales and purchases has to be corrected when we do the consolidation part, and that's the reason what you are saying the differences.

Second, you are mentioning about inventory adjustments and inventory loss, there are not two separate things. There is only one thing, which is inventory loss which occurred because of the inventory which were carrying from the last maybe quarter one, which MD has just explained we built it because of the brands' inventory which we have to build in for the selling during the last 12 months, and by chance, the prices of the basic raw materials or finished goods fell down in last 9 months, and that's the reason there was some inventory loss.

There is no adjustment as a one-time. These are all pricing matters which happened for this 9 months.

There is only one thing, not the two things.

Sir, can you share any figure what would be the inventory adjustment and inventory loss combined, whatever figure you have? Because, sir, this quarter numbers obviously show there is an adjustment as you rightly said there have been changeover.

That is not operational EBITDA, right? Our current quarter which we have reported.

That's what, sir, just wanted to get a fair picture on the number side.

There is no adjustment, which I will say again. There is no adjustment.

The inventories are always valued based on the accounting standards, and as per in a layman terms, I will say the cost or the realization value, whichever is less. It has been valued accordingly in each and every one of the quarter.

Because the prices of the FG and corresponding raw materials have fell down in 8, 9 months, in the last quarter, I'll just give you an example. For example, we bought some raw material at 100 rupees per kg.

Now it is coming at 92 rupees per kg. Corresponding FG has also reduced by, for example, 8 rupees per kg.

That 8 rupees definitely will be loss.

Understood, sir. Sir, this is not explaining that standalone EBITDA of 23 crore versus our annual some 30, 40 crore versus 80 crore EBITDA last quarter.

That's what, sir, this 40 crore difference is some inventory adjustment. We can take that as the number?

Which inventory adjustments you are talking about? Can you clarify your question again?

Sir, when we look at your annual EBITDA figure of Thailand, okay, that states around sort of 80, 85 crore.

Hello? Actually,

yeah, essentially Aditya, I think what Bhupesh is trying to say is that there is no adjustment per se. As the prices fell, we have obviously realized a lower revenue on those sales as opposed to what it was valued in the preceding quarters because the prices themselves have fallen.

The rationale for keeping that high level of inventory has been already explained in my previous answer, right? Obviously, this would not continue, to your point of how it has occurred, because we are not intending to build up any more inventory than is required from the purpose of the sale in the same quarter.

This is not something which would recur, to your question.

Got it, sir. I'll join back in the queue.

Sure.

Sir, good afternoon and thanks for the opportunity. Sir, first question is on the polystyrene part.

We recently expanded our capacity from 65,000 tons to 1 lakh tons with more of the expansion towards GPPS. Just wanted to understand how are we in terms of the approvals from the OEs, specifically from the appliance side, and generally how much time it takes for each of our OEs to approve our products?

That is part A. Part B, since we are in the beginning of a season of higher sales possibly from the appliance side and consequently our HIPS sales would also be forming part of that peak season for the appliances, how we are geared up in terms of improving our volumes from the polystyrene part?

Thanks, Nirav. See, essentially, when we increased our polystyrene capacity from 65 to 100,000 tons, the expansion has come primarily from increasing the general-purpose polystyrene volumes.

What we have done is in general-purpose polystyrene historically, a lot of it used to be into non-OE segment. Today, of course, the OE segment is significantly higher even for GPPS, and I would say more than 50% of the sales are coming from GPPS.

I think overall sales in GPPS are not to the tune of the capacities that we have available, and that has also been account of, if I look at the 9-month period so far, the first two quarters of course were very muted from polystyrene demand itself, and there was also a lot of kind of additional volumes coming in. Overall demand being low, we didn't get the advantage of that, and of course, that has partially recovered last quarter and is looking good now.

In terms of approvals, yes, it depends on which grade we are approving. For GPPS, the approvals or for HIPS also the approvals, depending on the grade, can range anywhere from 3 months to 9 months.

Some of the HI approvals we have already got now, which were earlier in place, and HIPS we are running pretty much 100% capacity utilization, and the OEM percentage also is quite high now over there. It's in excess of 50% to 60%.

We believe with the kind of season coming in, we are well geared on HIPS. Like I mentioned, we are completely sold out, and on GPPS, yes, we have additional capacity, but I'm not sure whether we will be able to completely sell that capacity for general-purpose polystyrene.

Got it. Just a bit to add here.

Whatever the volume growth we have seen in third quarter over the second quarter on a standalone basis, is it right to presume that most of it has come from the polystyrene and not from the ABS?

Actually, there has been a volume growth. If you look at year on year, for instance, there is a growth coming in from ABS as well.

If you look Yeah, from the preceding quarter, yes, polystyrene would comprise a significant portion because Q2 in polystyrene is extremely muted, and in the third quarter, polystyrene sales definitely did pick up.

Got it. Sir, on the polystyrene part, like you mentioned that we have been already sold for HI, but for GP most of the grades the approval cycle is 3 to 9 months, and we would have done close to around 50%, 60% of the customers on board from the OE part.

Just wanted to understand from the import perspective, those grades which are imported into India is more of the GP side or more are on the HI side? Why I ask this question is just wanted to understand are we able to replace those imports of GP into India through our improvement in the volumes, and that could be substantial, right, because whatever we have expanded expanded on the GP side.

If you can just share your perspective here.

A lot of the product, as you rightly pointed out, which comes in a lot more comes in on the GP side than the HI side. On GP side, again, a lot of the sales are not necessarily going to OEM.

They come even into the unorganized market. There pricing is a big driver of that market, and sometimes we consciously decide not to participate in that market as well because the pricing can be extremely low.

While it is an opportunity, I think it depends again specifically which time in the year it makes sense for us to participate in that opportunity. Like right now, of course, is a better opportunity or a better time to do so, but in some quarters, the prices are extremely depressed and the imports can be too competitive for us to really participate meaningfully over there.

Got it. Sir, second question is on the SAN part.

If you can share at what rate of utilization we are currently running for the SAN business, A? B, just wanted to understand your perspective, a slightly theoretical question, whenever we will expand our capacity of ABS from 100 KT to, let's say, 150 KT, is Thailand plant be a good option for sourcing our SAN requirement, which would also help in improving the capacity utilization for the Thailand plant as well, giving them an operating leverage benefit and hence the profitability?

If you can share your thoughts here. First, A, for the India business, and B, whenever we will do the expansion, is SAN imports from Thailand a feasible option?

Thank you so much.

With regards to SAN capacity utilization, right now, as we produce SAN for merchant as well as for captive consumption. The merchant SAN market, we have majority share.

More than 50% of the share for the merchant SAN is produced by Styrenix. With regards to SAN availability, we still have some additional SAN available, though not a lot.

Even if we come in with additional 50 KT ABS, I believe we'll have some SAN, but we are also expanding SAN capacity. I think in terms of alignment on when those additional capacities of SAN will come into India, it will be aligned with the additional capacity of rubber also coming in.

SAN from Thailand, I think, would work out to be a little bit more expensive for us in India, and again SAN in Thailand is kind of a premium product for which the realizations in India would be lower than what we can potentially realize in other areas. Operating leverage is something that we have looked at and we will look at also, but considering the freight component, the import duty component, and other costs involved, the realizations then in Thailand become extremely low or not very competitive at all.

Got it, sir. Thank you so much.

I'll join back in the queue.

Sure.

Hi, very good evening, and thank you for the opportunity. Just firstly on your perspective on the demand and supply for ABS both in India and globally.

You could share some thoughts on how do you look at supply and demand building up, what's really happening across the globe, Indian imports, some outlook on pricing will really help. That's the first question.

Okay. Thanks, Rahul.

As far as demand and supply in ABS in India is concerned, there is no significant change. Yes, we have had another company also adding in capacity into India, but I believe that is yet to stabilize.

We haven't seen any major impact in the demand-supply scenario, comparatively speaking, in India. Competitive intensity as far as imports is concerned remains at par with what it has been, I would say, last year.

There is no significant change. Yes, as you might be aware, BIS was withdrawn a few months ago, but we haven't really seen any impact on account of that withdrawal from players say who were earlier not registered with BIS and would have had the possibility now to supply material into India.

We haven't seen any movement in that regard yet. The demand-supply scenario for ABS in India, I think, is still fairly status quo what it was.

India still is a net importer. There is still a strong preference for and the requirement for Indian capacities, incumbents to increase their market share, and that opportunity does exist, which we are working towards trying to gather.

With regards to global scenario, again, there is no major shift or major change. We have the same overcapacity in China, which has existed now for several years, and also significantly high capacities in Korea and in Taiwan and some of the other regions relative to the market.

There remains that pressure, competitive pressure on the pricing as well. The demand-supply globally again, if I look at in the last 1 year, there is no significant change in what was the scenario earlier and what is the scenario today.

In terms of your own outlook on pricing and volume growth, right? Every 6 months at least in India, I'm expecting new capacity on ABS, maybe our Supreme's plant restarts and then we have some capacity from there.

I think other player, Bhansali, also talking about September, October '26 of 25,000 tons. If you just total this up, 25,000 of Bhansali, our capacity I think is lined up for December.

Every 6 months we're going to see almost 140,000 tons of new ABS, right? How would you think about pricing here and your own volume growth?

Rahul, essentially, I think I am not 100% sure of the timelines on when Supreme's plant will start or, for that matter, when the other competitor's additional 25 KT will come on stream. Again, our additional capacity, I think will come sometime this year, but would be, I think, a little bit closer towards post December rather than December.

We haven't given any official timeline yet, and we are not looking to do that because there could be 1 or 2 months' kind of delay or advancement, either which way is possible. We'll see.

If you look at the overall market scenario, there is still 50% of the product is still imported into India. By our own estimates, ABS demand is higher than about 350,000 tons or even probably closer to 360, 370,000 tons this year, as against which, the domestic production, if I exclude Supreme so far, is still less than 50%.

I think there is sufficient market opportunity, even with additional capacities coming in, to sell. I think we'll still remain a net importer even post all of that in spite of all these capacities coming in.

I think, again, depending on where one chooses to position their product, there is an opportunity, and I don't necessarily think that there is going to be a significant pressure on pricing other than what is already there in the market today. That's what we have seen in the last 2 years as well.

Whatever pressures we have seen earlier are going to be similar to the sort of pressures we are going to see in the near future at least.

My second question was on the expansion of ABS, just same theme in terms of status update for the construction, machine orders, and start of trials both for Phase 1 and Phase 2. If you could just update what's the current thought process in terms of how do you want to go about the two phases of 50,000 tons each?

Like we said in this current financial or the coming financial year, which is FY '27, we do intend to start Phase 1 of our expansion of ABS, and we are on track. Like I said, I'm going to restrict from giving an exact date and month, but as I mentioned, it is going to be in the second half of the coming financial year, and we are very much on track to achieve that.

In terms of equipment ordering, in terms of whatever goes for that construction part, everything is on stream and online. As of now, we don't have any significant update to give because there is no deviation from that.

If there is any deviation, we shall definitely inform our investor community. That remains to be exactly where it is.

A second phase again will be post that, which potentially will be in the next financial year. I think, again, it is tied into when the first phase gets completed.

I think in the coming few quarters, we'll be able to shed more light on exactly when that will happen.

Okay. First year of operations for Phase 1, does it mean that can we do 60%, 70% of utilization into fiscal '28?

Is it possible, or it takes more time?

I believe that would be possible. I think once the capacity comes on stream, we should be able to achieve fairly high capacity utilization numbers.

Got it. Thank you so much.

I'll get back in the queue. All the best.

Sure.

Hi, sir. Thank you for the opportunity.

With regard to the Thailand plant, when we consider that cross cyclical spreads, what would the break-even sale for the Thailand plant be considering across cycles? Also, is there a possibility of you incurring cash losses over there in the near future?

We understand that the inventory thing that happened was a one-time thing. Beyond that, is there still a possibility of one-time cash losses there?

Also what is the quantum of the inventory loss that you have incurred in Thailand? That's it.

Okay. Thanks, Meet.

With regards to Thailand, again, it's a fairly complex product mix that we have over there. We produce some fairly interesting and proprietary grades like the liner ABS that we make.

We also make food-grade SAN, and we make high-heat ABS which goes into the automotive industry in China and elsewhere. Now a lot of these grades are not commonly produced by other companies.

However, there is a lead time involved in getting these approvals in place with additional customers, for which we have sales teams already on ground in Thailand, in China, in Vietnam, in Japan. Also, by the way, we have got representation in Japan as of last few months.

We are moving aggressively to get these validations done. Now the break-even or the EBITDA-positive scenario will depend a lot on the product mix that we are able to achieve in Thailand.

That number can range anywhere from 65% to 80%. If the product mix is not very favorable, it can be a higher capacity utilization which is needed, and if the product mix is favorable, it can be at a lower capacity utilization.

We have to balance these things and see what works best for the organization, because with many companies, we are also a new brand trying to settle in. Once we make commitments to our customers of being able to develop products and supply to them, we have to stick to those commitments because this would impact us also in India and with other customers eventually, because these are very large kind of OEMs which have global presence, and we have global aspirations as you can tell, where we would like to be validated and working with them everywhere.

Keeping that in mind, we have to be very mindful of which product mix we position, what we promise to customers, and exactly what we deliver there. This requires a little bit of patience.

This may also mean that it takes a little bit longer time for us to achieve the break-even numbers that we're looking at. Hence, as far as inventory-related cash losses that we have had, of course, we have no strategic reason or interest to build up inventory going forward that we can think of right now.

Hence, we do believe that whatever we sell and we produce will be fairly comparable in terms of valuations for specific quarters going forward. We do not account that to be an issue in the future.

Otherwise, I think we have to wait and watch how the situation in Thailand unfolds. We've always mentioned there is a kind of huge advantage in terms of technology, market positioning, and available capacities in Thailand, which will benefit us as a group in the medium to long term, and that remains to be true regardless of what has happened in the last few months.

Right, right, right, sir. As we stabilize our operation and as we explore our sales mix, is there a possibility of you did tell me that break-even would vary as per capacity, but is there a possibility of cash losses still occurring in the next couple of years?

Again, hard to predict, but I don't think there would be necessarily very significant numbers unless something changes which we do not anticipate. Whatever would be happen would be fairly manageable in line with the size of operation over there.

Right, sir. Thank you.

All the best with Thailand and in general too. Thank you.

Thank you.

Hi. Sir, with respect to this Thailand operations, so, if I am just seeing the numbers and I'm unable to comprehend the commentary that you're giving, quarter one is where I think you took up the larger or full utilization of the plant, and then we have the inventory figures of March '25 and September '25.

Those are the two figures of inventory which are available with us on consolidation. I'm actually unable to comprehend the fact that the whole inventory change came in quarter four quarter three.

If you could just elaborate a bit, because between quarter between the quarter four and September quarter, I don't see any major change in the inventory.

Hi. Thanks, Pritesh.

If we look at the inventories which had built up in kind of March '25 versus the inventory which is towards the end of December, right, there is a reduction in inventory, which is quite significant. It's also again what we sell, right?

If there are specific products which would have been valued very highly at the end of that quarter, and we would have sold it down at a lower price because the prices of the finished goods have fallen as the raw materials have fallen as well. For a lot of raw materials, the price reduction has been as high as 30%.

If we take that into account, then that's what has happened essentially. The inventories are still a little bit higher than eventually where we want it to be, but definitely there is a significant reduction in the inventory levels from what it was say when we built it up not even March '25, but probably June '25 up to December.

There was a gradual build-up of inventory started in January when we took over the business, and like I mentioned that till end of June is or for 6 months is when we had the possibility to build up the inventory because then we could only potentially liquidate that inventory to ensure that we do not lose any business with as far as customers are concerned from a long-term perspective. It's just that the timing coincided with significant fall in prices on raw materials as well as finished goods.

The

entire 40 crore difference between the standalone and consolidated on a Q-on-Q basis, how much of that is associated with inventory?

More than 75%.

Okay. The entire change in price has slowed down between quarter two and quarter three because until quarter two, we don't see any of it?

Like I said, there was still inventory build-up happening, right, to some extent, which then of course we stopped midway in the quarter, and then in the last quarter, there is a significant inventory reduction. There'll be further reduction in this quarter as well.

You were running plant at a higher utilization in September also and in somewhat between the quarter three also?

Towards the beginning of it, and then we have reduced after that.

Towards the beginning of it. Okay.

Correct, correct, correct.

Can you then just give us the price between let's say from Jan to December or let's say at the beginning of the year and towards the end of the year, what is the price changes that you have seen in your finished goods and the key raw materials at the start of the year towards the end of the year? Just two data points.

I think when the inventories were at the peak to when they came down, I think the gap could have been as high as about 20%, 25%.

This is for RM or this is for finished goods? Both.

Both. Normally, it moves in tandem.

Okay. The other thing is on a 9-month to 9-month basis in our standalone business, is there any product mix change on a 9-month to 9-month?

Because we are trying to assess the operating profit per ton. Is there any product mix change, or this is just to do with the realization or the spread difference?

There are two things to keep in mind here, Pritesh. If we look at the previous year on a 9-month basis, the September quarter was unusual, which we had pointed out.

There was a gain that we had got on account of ocean freight. The June, July, August, September quarter of FY '25, there was significant higher realization, which we had had, which normalized also after that in the following quarters.

If you eliminate that and consider it at a normalized basis, I think on a 9-month to 9-month basis, we have only grown in terms of volumes, and realizations largely have remained similar. There is no change.

Quarter-on-quarter, yes, there could be some changes in product mix for sure.

That's why I asked nine 9-month to 9-month.

So 9-month to 9-month, like I said, if you remove the July to September unusual gain that we had, there is not any significant change in terms of realizations. Only our volumes have increased to some extent here.

Volumes increase, realization similar, spread reduction because of RM increase.

Spread reduction really has not happened, is what I'm trying to tell you. There is a product mix change as well to some degree, but Okay, the spread reduction you can say from July, September of last year to this year, yes.

That July, September to any quarter would be a spread reduction because that spread itself was unusual because of a kind of gain we got on account of some supply chain disruption as far as ocean freights are concerned, right? We took that gain in that quarter, but that normalized.

Yeah. If you eliminate that gain and you consider all the other spreads where they have been for the last 2 years, there is no change.

My last question is based on your experience, and not that you can forecast, but based on your experience for all these years that you're doing this business, and when you see this draw down on pricing by about 20%, usually what have you seen after that? What are your experiences?

We have seen the prices remaining low, going further down, remaining the same, or going up. I don't know how to answer your question because there can be a lot of volatility, right?

You can see the current prices as well in the market. Prices have tended to move upwards again because of some disruptions in some raw material supplies.

There is a spike currently. This is not something which is representative of what happens every time.

There are times when these kind of spikes happen. There are times when the prices remain where they are.

Very hard to predict based on the past, in which direction prices would normally go. Currently, prices are tending to move upwards.

Okay. Lastly, in your last calls, if you recall, in your FY '25 calls, you had this cost reduction to flow into your EBITDA via operating utilization, via power cost reduction.

You had called out that the EBITDA per kg or the per ton has a higher number to come in. When I was asking you from a 9-month to 9-month perspective and you said that quarter one was inflated because of the one-offs that you got on international.

I didn't understand that because my question was actually 9-month this year to 9-month last year. This year 9-month had to get all those benefits on your OpEx and your power cost, which you had done last year.

Maybe you want to elaborate a bit only on 9-month to 9-month. I can understand every quarter there is a product mix change and there is movement on margin numbers because of polystyrene to ABS, but on a 9-month to 9-month, what is the assessment?

In terms of the benefits that we are expecting on power, this is an agreement which again we have publicly mentioned, we had done with a third party where we will be taking in some kind of hybrid power, and that help us in reducing our power cost. That agreement will come into effect only in this month or the next month, February or March.

We will see those benefits only accruing now in the coming few quarters. Since that agreement was put in place, it typically takes about a year, or 14 months for all these agreements to materialize into actual power supply or, kind of feed in to the grid as a supplier builds up that capacity of that hybrid power.

We'll see that advantage coming in in the next few quarters.

Okay. From this year to next year, any volume

Hi. Thanks for the opportunity.

Sir, two questions from my side. One is the capex number for FY '26 if you could share that.

Second is on this Thailand plant. If I see the difference between the volumes in the presentation, it's around 15,000 tons.

You mentioned that there are some interparty transactions. If you could give me the exact number of all the volume for Thailand this quarter?

Krunal. In the presentation, the numbers are after eliminating the intercompany transactions.

They are net of that, nothing to be netted off again from them. Regarding the capex numbers, maybe as mentioned last time, the capex, it depends upon a lot of things like purchase orders, how many are raised and all those things.

I think we, as MD had mentioned in earlier questions, we are in line as what we have announced for those capex completion project in F2 FY '27, and we'll be completing that. I will just say the number again, which I had mentioned earlier, overall capex for Phase 1 is approximately 350 CR and which will spill over with this year and next year, most of them.

We will finance them with internal accruals as well as maybe a capex loan. We have not yet taken and have funded it through internal accruals only.

Yeah?

Okay. Just one last question on the spreads part.

Sir, Rahul ji mentioned that spreads have been similar over last 2 years. Can you just help me elaborate how much of our business is on a formula-based pricing and how much is on a spot pricing?

Krunal, most of the business, like I said, in ABS, a lot of it works on formula basis. More than 70% of the business works on a formula basis.

Essentially, again, a lot of these business were even governed by volume contracts and price contracts for the whole year. Even when we don't necessarily have volume contracts, the pricing formula still holds true for even those customers.

The formulas in fact play a part in more than 70% of the overall business.

Got it. That would apply for PS also?

For PS, that number is lesser. I think it's restricted to again where we have OEM business in place.

Like I said, about 50% odd. Balance would not be as per as a formula.

Got it. How the similar number be for Thailand?

Thailand again, a lot of the business, I would say, practically all of the business is on formula. Very little business is on spot.

Got it. Great.

Thank you so much.

Sure.

Hi, thank you for taking my questions. The first question is continuation of the last response where you mentioned most of our business is annually contracted, 70%.

I was just curious if the spreads on imports become more favorable for customers, do they switch to them once the annual contracts expire, or what I'm trying to understand is how easy it is for customers to switch to them on the import side was question one. The second question was to your comment that oversupply in China has been there for quite some time now.

We have seen Chinese suppliers dump products at cost or even below cost in some cases in the past, right? In that context, how do we get confidence that the spreads in India will largely hold, and why won't Chinese suppliers flare into over there?

These were the two questions. Thank you.

Thanks, Manjeet. See, with regards to our contracts with customers, typically, this is decided basis the value and the customization that we provide to each of the customers.

Now imports have been putting pressure on us since many, many years. Typically, OEMs find value in what we offer, or customers rather find value in what we offer to them, and hence, those spreads are wherever they are, they are settled, right?

Year on year, they remain similar because, again, of the value which they see. Typically to switch, there is a, like I mentioned in my earlier responses, there is a validation process which is required to be undertaken.

Some of the customers do do that from a risk mitigation perspective. We are not able to satisfy all the customers in India.

As we are import dependent for ABS at least. Keeping that in mind, we have most of our customers who may be relying largely on us or, in significant part on us, but would be having some share of imports as well.

What we have seen is when we have increased our volumes, say, when we took over management control in '22 to now, we have almost doubled our ABS business, and that has not come at the expense of any spreads. In fact, the spreads have largely remained similar, which just goes to say that while there might be pressure from imports, there might be pressure from these different sources, the customer still has a strong preference for locally produced product because of the customization, because of the delivery, because of multiple factors.

Keeping all of that in mind, we have not had a challenge in essentially doubling our volumes in India in the last few years. The oversupply in China has been around for a while now.

It's not a new phenomenon. Other than China, I think the larger volumes still in India come from Korea and from Taiwan and somewhat from Thailand as well.

These countries, again, there is an oversupply situation. For specialty ABS or customized ABS, the production in these countries is more suited to the demand in India versus currently from China.

While that may change, we'll see. How the oversupply situation in China and their consequent ability to develop those capabilities, how that will play out, we will keep an eye out on that.

Currently, that's not really a significant threat in India. Even after, like we discussed, after removal of BIS, we haven't seen any movement of product from China into India, almost negligible or zero, I would say.

The spreads haven't really come under pressure. The spreads remain where they are, and they have been dealing with the import pressure for quite some time.

Okay. Thank you so much, sir.

Sure.

Yeah. Hi.

I'd like to ask the demand scenario for Q4. Like we had guided for a 12.5% volume growth.

Do we think we will be able to achieve it for the year?

Yeah. Hi, Tanish.

I don't think we will do 12.5% growth. In fact, we had a lot of pressure on polystyrene in the first 6 months.

While some of that has rebounded and we are seeing good volumes in polystyrene, while the growth in ABS is very robust, in terms of growth in polystyrene, it remains on an annualized basis a bit sluggish. Hence, we have seen growth in the last quarter, and in this quarter also, we will see good demand as we normally do.

This is the seasonal effect that we have in that business. On an overall basis, the growth will be a little bit lower on account of that growth in polystyrene being lower, essentially.

Okay. My next question is we were talking about overcapacity in the global scenario.

How does it give us confidence in the Thailand business? How confident are we that we will be able to scale it up on a long-term basis, like medium to long-term?

Tanish, essentially, the product profile that we have in Thailand is a little bit different from the products being currently produced in China, for instance. There is, of course, supplies from other regions which are also targeting the same markets.

We do have some advantages as far as products from Thailand are concerned, and we are actively marketing those products with the help of sales force which we have now engaged in all these geographies. We have been able to successfully retain a lot of the customers in spite of a new brand.

Typically, the qualification process for any new product, whether even if it's a brand name change, is a long process. We've been able to do that in a relatively quick period, which only tells us that there is a strong demand preference for the product from Thailand.

We believe that going forward as well, to the extent we need to do in terms of demand utilization in Thailand, there is a market opportunity. It's just that there is a process which we need to follow, and as long as we do that and we keep making those efforts, we do believe that we will be able to achieve higher sales volume from Thailand in those regions because of the products that we produce there, which are not commonly produced everywhere else.

Yeah. Thank you.

My last question would be on the Middle East. Last quarter, we had spoken about possible exports to the Middle East and we had set up a subsidiary over there.

Could you give us any update on that?

Currently on ABS, we don't have additional capacities. I think as we are expecting this additional capacities to come online during the course of this year, we will see how we have additional capacities to offer.

We are in the process of of course getting validations done in other regions. Should we require to sell material to ensure our capacities, we're just doing risk mitigation from that perspective.

I don't foresee actually being necessarily needing to do that in the near future. From a long-term future, yes, we are looking at exploiting any opportunities to develop high-value clients whether it's in the Middle East or anywhere else.

That effort is ongoing.

Great. Thank you.

Thanks for the opportunity. Just wanted to know post the Thailand acquisition, considering you mentioned some broad range of ABS profile, did we reap any benefit in the Indian operations in the percentage terms of volume?

Am I audible, sir, now?

Slightly better. Please, just speak slowly, I'll try to catch what you're saying.

Okay. Actually, post the Thailand acquisition, you mentioned about some newer grade ABS back then.

Any material benefit you reaped from that on know-how in India, considering the percentage of the volume which you sell in India?

Yeah. Thanks, Tushar.

Obviously, like I mentioned and I continue to believe that there is a lot of value in the technologies that we have in Thailand. We have got a good understanding now of those products.

We will incorporate capabilities in order to be able to produce those grades in India in the coming time. We have taken cognizance of those capabilities to be built into our expansions that we do in India as well.

Currently, we are tapped out on capacity, but as we move forward, there will be an opportunity to tap into those markets with the aid of those technologies even in India in the future. While we don't see today, or I would say in the last few months, directly any products from that technology perspective being a part of our revenues currently in India, in the future, definitely, that would be the case.

Fair enough, sir. A clarification question, actually.

The polystyrene, the capacity expansion, is it planned for Phase 1, or is it 100% in the Phase 2?

Polystyrene, we've already done initial debottlenecking where we increased our capacity on GPPS, like I mentioned. Earlier, the capacity was around 65,000, 70,000 tons, which is now about 100,000.

The capacity augmentation has come on GPPS. On HIPS, again, we don't have any further kind of management decision taken on any capacity augmentation as of yet.

Fair enough, sir. This styrene monomer prices are increasing.

Do you see the prices are here to stay, or do you see still a volatility going forward as per your experience, sir?

I think styrene monomer volatility, based on this organization's knowledge and history, has remained volatile for the good part of the life of this organization, which is 50 years. In fact, the styrene monomer prices remained fairly stable, though there was a significant reduction last year, like I mentioned, from the early part of the year towards the end of the year.

The prices have moved up sharply recently. Again, many times, people link these things to crude, but that is not necessarily the case.

The crude hasn't really spiked or moved anywhere near the direction where styrene has moved. Difficult to predict basis other petrochemical feedstocks, if you will, for styrene monomer, at least in our experience.

Fair enough, sir. That was really helpful.

Thanks.

Sure.

Hello, sir. I want to know what is happening in the Thailand plant.

What is the reason why we're not able to increase the utilization? You said that the demand for the product is strong, then why are we not able to scale up the revenues?

Also on the loss in part, is it 100% attributed to inventory loss, or is there any other reason to that as well?

Hi, Vidhi. Thank you for your question.

Like I mentioned, in Thailand, we have launched a different brand, which is our Indian brand, and this is something which requires validation to be done in new customer base, if you will. In India, we are a very strong, recognized brand, and the product is well approved with most OEMs, molders, and the entire chain.

From Thailand, while the product itself is approved and works very well, the brand has to be approved. Also, from Thailand, more effort needs to be put in to all these different geographies, where we have done by adding more sales force.

There is a validation process which takes time. For instance, in the automotive space, the validations can take up to 18 months.

Specifically, if you look at our target markets there in Asia, which would be focused on the EV segment, focused on the more premium electronics or the household appliances or the medical devices in those regions, all these industries have a long gestation period in terms of validation. The product is good, it works well with the customers that we already have, but there is that lead time that we have to work with.

With regards to in India, of course, none of those issues exist, we don't see any of those problems.

Okay. By when can we expect the capacity to ramp up in Thailand?

Also on the loss part, is it 100% attributed to inventory loss only, or was there any other reason that as well?

The capacity utilization in Thailand is quite low, right? While we may have run the Thailand plant at high capacity utilization in the first few quarters, where we didn't see any losses, as the capacity utilization comes down, there is a loss of operating leverage, if you will.

That continues to be the case, and that does have a negative drag. Like I mentioned, more than 75% of the losses are on account of inventory valuations which have taken a hit in the last quarter.

When we have sold the product. Essentially, that does remain the case.

Till we don't bring up the capacity utilization to a high enough number, there will be some drag. Now, with regards to building up the sales, again, it's an effort we're putting in, but there is a medium to long-term view which we need to take as far as Thailand is concerned.

Thank you, sir.

Thank you.

Thank you, everyone, for joining us on this earnings call. We appreciate your time and showing interest in our company.

In case of any queries, you can get in touch with us or SGA, our investor relations advisers, and we look forward to meeting all of you over the next call. Thank you.