Ladies and gentlemen, good day and welcome to Styrenix Performance Materials Limited conference call. From the management team, we have with us Mr. Rahul Agrawal, Managing Director, Mr. Bhupesh P. Porwal, Chief Financial Officer, and Mr. Chintan Doshi, Manager, Legal and Company Secretary. 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 this conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded.
Further, on behalf of the management of the company, we would also like to remind the participants that this call has been conducted subject to and in line with the disclaimer mentioned in the investor's presentation, as is available on the stock exchanges. I now hand the conference over to Mr. Thank you, and over to you, sir.
Yeah, thank you very much. Ladies and gentlemen, namaste and good afternoon, everyone. I am pleased to welcome you to our Quarter One Financial Year 2025 conference call. As we reflect on our performance in fiscal year 2024, I am delighted to announce that we have witnessed a robust demand for our products, marking a significant growth trend. We are on schedule of our de-bottlenecking and expansion projects announced in previous years. Coming to the financial performance, the highlights are as under: sales volume has increased by 8.6% compared to Quarter Four of FY24 and by 21% compared to Q1 FY24. Revenue increased by 16.7% compared to Q4 FY24 and 28.5% compared to Q1 FY24. PBDIT stood at 13.1%, which is better by 0.7% compared to Q4 FY24 and 3.7% better compared to Q1 FY23.
Profit after tax stood at 8.7%, which is better by 0.5% compared to Q4 FY24 and better by 2.8% compared to Q1 FY24. These are all about the highlights of this quarter, and now we will proceed to answer the questions you may have. Thank you very much.
Thank you very much. We'll now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking your question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press star and one to ask a question. The first question is from the line of Nirav Jimudia from Anvil Research. Please go ahead.
Yeah, good afternoon, sir, and congratulations for a great set. So I have two, three questions to ask. So the first is on our ABS. So if you can just help us understand how were the imports of ABS in India in Q1, first quarter of FY25 vis-à-vis last year and fourth quarter of FY24. If you can just share the trend.
Okay, hi Nirav. So in terms of imports for this quarter, we don't have that complete data yet because, as you know, specifically for the month of June, the import data would be really available to us only by early August. However, as far as imports are concerned, year on year, there doesn't seem to be any major shift or any major change over there. We have got some share of that import, obviously, as our volumes have increased, but overall, the imports are more or less stable, if I must say.
Correct, so the reason for asking the question was because there were a lot of challenges in terms of container shortages globally, and even freight cost was elevated, so I was trying to understand that whether this has helped us to put some additional volumes and gain those volume share in the domestic market, and whether if you can also explain that whether these gross margins which we have reported this quarter include some element of those higher freight costs which would have elevated the domestic prices of ABS.
We have seen the impact of ocean freight. So ocean freight impacts us in two ways. There is bulk ocean freight which is impacted on our raw materials which comes in by the styrene and acrylonitrile. And there's, of course, ocean freight involving containerized movement of finished goods which comes into the country. If we look at bulk freight, actually, there was a mismatch towards the end of the last quarter, an early part of this quarter, where a lot of our material, in fact, got delayed. And due to that, we, in fact, had to even buy some material in the spot market because we didn't have the availability of raw material coming in at that time.
So, in fact, that was a bit of a negative, if you will, because we had to buy some material when that material did not come in on time. Overall, not a major impact, but some impact was there. In terms of finished goods coming in, in terms of the shortages of freight vessels, that is happening more so in this quarter as opposed to the last quarter. So there is not a major gap there. I mean, if you look at our overall EBITDA margin, that hasn't changed much, right? And even kind of quarter on quarter, so that's very similar. It's just that our volumes have increased, and that is purely a function of us being able to produce more and sell more.
Correct. The second question is in terms of our sales volume for ABS, so I just wanted to understand from you, do we sell more of those colored ABS and the compounds of ABS as against those white or the black master batches which are coming to India, and when we generally say that 65% of our sales volume for the ABS are of specialty grade, does this include those colored ABS and the compounds which we sell to the customers here?
When we talk about specialty ABS, it does include some of the colored grades, but not all colored grades. There are some colored grades which would be more along the lines of the standard grades of products that we supply in the market. It's difficult to give that exact breakup over here during this call, but there would be, like I said, some component of the natural grades of products or the base grades, which would be in the 35%, or actually that number is even lower. That would also consist of some colored products, but not all colored products. We determine the specialty of the product based on the complexity in manufacturing it, as well as the value addition while selling the product.
Correct. And the imports which are coming to India is predominantly those white or the black ABS and not the colored ones which we generally sell, right?
Not really. So the product that comes into the country is a full spectrum. So there are products which come in on the natural side as well as on the specialty side. So the percentage of natural ABS might be a little bit higher coming in from outside the country, but there is also a significant percentage of specialty ABS or colored ABS, if you will, which is sold in the country from outside.
Got it, sir. The last from my side is, if you can just help us out in terms of both for ABS as well as PS, the split of volumes between, let's say, for ABS, predominantly auto and consumer durables, and for PS, let's say, for auto, consumer durables as well as the stationery products.
In PS, there is no sale to automotive.
Yeah. Okay. So it's more of consumer durables and the stationery ones.
And packaging. So, like I mentioned in my previous calls, in ABS, automotive and household appliances are the larger markets that we cater to, followed by electronics, then kind of medical devices and toys, stationery, things like that. And in the case of polystyrene, it is household appliances again, which is an overlap with our ABS business, and there is some packaging, which is also a significant business, and then followed by the other segments that we cater to.
Got it. Just to reconfirm, sir, the timeline for the commissioning of our de-bottlenecking, like last time you mentioned, it could be coming in H2 of FY25. So just to reconfirm that and the volume guidance, what you said earlier, just to reconfirm, if you can just share both of them? Thank you.
If you look at our overall volumes that we have done in the first quarter, it's close to 48,000 tons. As opposed to last year, we did about 39 or 40,000 tons in the first quarter of the year last year. That's about a 20% increase. This incorporates, obviously, the de-bottlenecking which has happened over the course of last year as well as beginning of this year, this financial year. As we go along, that is on track, and we will have additional volumes coming in in the second and the third quarters as well. Overall, I think our volume guidance that we had given in the earlier presentation of about a 15%-20% growth over the previous year, that continues to be the case.
Thank you so much, sir, and wish you all the best.
Thank you.
Thank you. Next question is from the line of Rahul Agarwal from IKIGAI Asset Management. Please go ahead.
Yeah, hi. Good afternoon, sir. Thank you for the opportunity and congratulations for the grant. Firstly, as you alluded to the sales volume outlook, just wanted to add a bit here. So obviously, it implies that there is some bit of de-bottlenecking which would also happen going into second and third quarter. Is that correct?
That is correct.
Okay. So broadly, 15%-20% is a consolidated guidance which includes ABS and PS both, right?
That is correct.
Okay. Perfect. Any thoughts or any comment you'd like to share on the EBITDA spreads we are making on both businesses for fiscal 2025 and 2026?
No, we have not given any guidance as such. We have iterated in the past as well that the company has undertaken projects to increase capacities, both by way of de-bottlenecking and greenfield expansion. Also, there is cost rationalization measures that the company is undertaking in terms of improving efficiencies. And last but not least, trying to increase the share of value-added products, be it by way of the existing product line or the new products that we have launched in the brand of Styroloy and Accrelon. So a combination of all these three would help us in achieving better numbers going forward, but we have as such no guidance towards that.
Got it. And could you specify a bit more on what kind of new products have been launched this year? What have you sold in 1Q? Could you highlight a bit more on that, please?
The volumes currently sold are not very significant. They are still kind of small in relative terms compared to the rest of the business that we are in. The products that we have launched right now, we have launched Styroloy, like I mentioned, and Accrelon, which are the two brand names. Under Styroloy, we are doing blends like Polycarbonate ABS, Nylon ABS, ABS PMMA, HIPS PPO, other products. In the case of Accrelon, it's ASA, which is a kind of weatherable product which works in applications where high weather resistance is required or weatherability is required or high UV resistance is required. We have done that as well as blends of ASA, which would be, again, ASA, PMMA, and so on and so forth.
Got it. Perfect. One question was on the working capital this quarter. How did June end? Is it broadly similar to what March was, INR 50 billion-INR 55 billion? Could you highlight what was the operating cash flow for the quarter?
This is not some information that we generally publish, but yeah, so.
Okay. No problem, and lastly, just on the CapEx, could you guide us for the amount of CapEx to be done for fiscal 2025 and 2026, please?
So currently, the overall CapEx for the whole year that we estimated would be in the tune of 60-70 crores. That number will be fine-tuned, actually, in the successive next few months because we will have complete clarity once our engineering studies are completed and to what extent we can accelerate the expansion projects and perhaps would also reflect on the CapEx accordingly. So I think by the next investor call, we'll have more information to share.
Okay. Thank you so much for answering my questions. I will get back in with you.
Sure.
Thank you. Next question is from the line of Priyank Chheda from Vallum Capital. Please go ahead.
Hi, sir. Congratulations for great setup numbers. So my question is on, could you elaborate what would be the contribution of SAN in this total 48,000 tons volume for this quarter? I believe it's also part of when you disclose 48,000 tons, it includes SAN plus PS plus ABS, correct?
That is correct.
Would you be able to disclose how much of the SAN would be sold in this contribution in this total volumes?
Again, we don't share individual numbers or breakup. We stop disclosing those exact details in comparative interests. But it is more or less in line with the numbers that we have been doing over the years, and there is not any significant change in that.
Oh, okay. Okay. Perfect. All right. So the incremental volumes have come from the de-bottlenecking of ABS and PS put together in that ratio, right?
Yeah. I mean, like I said, the product mix has not changed drastically across the board, and de-bottlenecking would have benefited all products.
Okay. Perfect. Coming to just a delta spread, sir, so we have seen slight improvement in ABS prices, maybe because of the ocean freight of the finished goods that you alluded to. While the styrene monomer raw material has also moved in tandem. So do you see some global dislocation in the delta spreads ahead? Any global development which you would like to highlight, maybe which we should think of, which can impact the spreads ahead?
So the global spreads have not changed much in the last kind of one and a half years since we have taken over management control. I think barring the first quarter of 2020 to 2023, when the spreads were a little bit higher, they kind of normalized post that. And they have stayed at a normalized level. Now, this is, I'm talking from a global perspective, and that continues to be the case today. So there is no major change from that. I think in terms of our own performance, of course, we are benefiting slightly from some operating leverage as our volumes are going up and with the total sales that we have been able to achieve of different categories of products.
Oh, great. Just last question on the power and fuel cost savings which you had alluded to last quarter, plus some reduction in the steam cost. In Q1, at least, we could see that there is a robust improvement on a per kilo basis. Of course, it has to do with the operating leverage too. Can you elaborate for us what should be the total cost savings that we should think of when it comes to FY25 in terms of power and fuel? And what can be the logistics cost savings that we should see in the forthcoming year?
So in terms of power and fuel, when we discuss about fuel, there are some projects that are ongoing where we are looking at more cost-effective and economic sources of generating steam across all our plants. In one of the plants, that has already been commissioned, and in the second plant also, it's near commissioning stage. The third plant also, we would have that commission probably in the next quarter or so. So I think over the course of this year, there will be some savings in fuel. Of the total savings that we are anticipating, at least 30%-40% of the total savings will come this year, and the entire savings will be visible next year.
As far as power cost is concerned, we are evaluating different options for which, again, we haven't yet kind of come out with a kind of declaration to the public market, which we will give very soon once we have that information on what we intend to do. That power saving will also come in full force next year, and for this year, I think probably towards the end of the year.
Okay. Okay. All right.
Yeah.
Thank you.
Thank you. Thank you.
Sure.
Thank you. Next question is from the line of Akshita Dave from Vivek Commercial. Please go ahead.
Hello. I have two questions for the management. Could you release the previous four-year volume data from FY2019 to FY2022? I understand you were not the management at the time. Could you still have that data?
So earlier, we have been not publishing those data in the last few years. And previous years, we have published the production volume data. So what exactly you want, if you can write to secshare@styrenix.com, we'll revert back to you on that.
Okay. My next question was, the promoters have recently released almost 20% pledge on their holding. Are there any more plans for the rest of the pledge to be released as well? Any clarity?
If you check the updates on the stock exchange, we have already informed that the entire pledge has been released, so there is no more pledge existing on any of the promoter shareholding.
Okay. Okay. That's great clarification. And I just wanted to confirm, the de-bottlenecking project was the same project that you have given to Mott MacDonald? Is that right?
No, that is a greenfield expansion project.
So has that started? Because this was given in February with a six-month start renewal, right?
So typically, what happens, ma'am, when we do any project, we have to do a basic and detailed engineering study. Mott MacDonald has been awarded the basic engineering work, which is due to get completed very soon. And that's when I said we will have a better idea of exactly what the CapEx will be for that project. So that work is still ongoing and due to get completed very, very soon.
Okay. Okay. Thank you so much. I'll get back in with you.
Yeah. Thank you.
Thank you. Next question is from the line of Ranbir Singh from Yashvi Securities. Please go ahead.
Yeah. Hi, Rawalji. Congratulations on a great set of numbers. While I was trying to calculate realization, so basically, for the last quarter volume, this quarter, you reported that you did 44,094 metric tons last quarter. But in the last quarter, the investor presentation, it was 44,538. So which would be the right number to take to calculate the realization?
So I think last quarter, up till last quarter, we have been publishing production numbers. So that is the production number. And this time, we have published the sales number. I think last quarter also was the sales number. Up till December, we were publishing the production number.
Yeah. Yeah.
That's the reason that it is. Yeah. Yeah.
Okay. So I had a question. So Rahulji would observe that realization that increased 7% quarter on quarter. So is this due to the base commodity price increase which happened in March 2024, which led to better realization of existing inventory, or was it due to a better product mix?
Realization has increased 7%.
Sir, realization?
Yeah. So it could largely be a function of product mix. As you know, the product mix changes quarter on quarter, all right? And that's why I've always guided that one should look at annual kind of data to get a blended idea of what those realizations would be because it's possible that certain grades of products sell in higher volumes in certain quarters vis-à-vis in other quarters. So this is more or less in line with what we would have expected for the kind of products to be sold in this quarter.
Okay. So I have another question. We have a listed competitor who's producing ABS. Their realizations were a little higher than ours. So ours is lesser mainly because of the product mix because we also produce polystyrene and that is sold at a lower cost. Is my understanding correct?
Yeah. Broadly, you are correct. So we also sell more SAN, and we also sell more polystyrene. And the spreads between ABS, SAN, and polystyrene all are different in the industry. And what we normally publish is a blended or an overall result, which is different from what the competitors would be publishing.
Okay. All right. Thank you so much. Great job. Thank you so much.
Thank you.
Bye-bye.
Bye.
Thank you very much. Next question is from the line of Tejas from Nivesh Investment Advisory. Please go ahead.
Hello. Yeah. Thank you so much for the opportunity. So I have a couple of questions. So taking it from the previous participants, you said our realization has increased because of the change in the product mix. But is there a factor of freight cost leading to this increase in realizations? I mean, there would be yeah.
So this question has been asked earlier. So I think in the last quarter, there is no real impact of the freight cost. So ultimately, that impact may come. But as of now, we don't see it in the last.
Okay. Got it. And again, sir, just a confirmation on a previous participant question. So you said there's a global spread, and the spreads for you two haven't changed upwards, let's say, on an upward trajectory. It's at normal level only, right? And you expect it to remain same going further, if I'm not wrong.
So this is the current understanding we have. Of course, it can change from time to time. But as of what we, as a management, believe to be the case today and in the near-term future, that indeed seems to be the case.
Got it. Got it. Okay. Got it, sir. No problem. Thank you. That's all from my side.
Sure.
Thank you. Next question is from the line of Dattaraj Chetnis and Individual Investor. Please go ahead.
Hello. Good afternoon, sir.
Yes, sir.
I'm audible, sir.
Yes, sir. You are.
Good afternoon to you and all the participants. I don't think so. But just compliments and compliments, sir. My immense gratitude to you and the board for the bountiful dividend. The company is highly commendable. The management of the company is immensely reliable, and the dividend policy is just incredible. The board deserves kudos and admiration for adopting the most equitable and fair business practice towards all stakeholders, which is very rare in the domain of listed Indian corporates. I am sure that you can see only such approach towards stakeholders among only multinational companies like Nestlé, Colgate, Procter & Gamble, to name a few. Thank you, sir, again, once again, and thank you to convey my thanks to the board, please.
Will do, sir. Thank you for your appreciation, sir. Appreciate your kind words.
You're welcome, sir.
Thank you very much. Next question is from the line of Ashish from InvesQ Investment Advisors. Please go ahead.
Yeah. So sir, if I recollect the last call, you guided that the EBITDA margin of around 12% was a base, and you will build up from there probably. So that's what we could understand. But historically, we've seen that given the nature of your business, the margins have both on gross and EBITDA, they've been pretty volatile over the years. So what changes for the company now that those bad days won't come back, as in those 12% margin would be the base for the company? I just wanted to understand that. Is there anything changes between you and your customers in terms of contractual arrangements or some inventory policy? Just your clarifications would help with this.
Generally, we don't give guidance on EBITDA percentage margins. What we have stated in the past is that post the two years of exceptional results during global supply chain disruptions, after that, things have normalized. In a normalized scenario, what we are seeing in the industry today, with all factors in play, is something that is sustainable, is what we have stated in the past, and we continue to state the same. In terms of margins, generally, the businesses work in terms of spreads, whether it is ABS, polystyrene, or SAN. Those spreads have remained sort of consistent. Some improvements we have seen, marginal improvements, as we, like I said, augment our capacities, get some operating leverage. We reduce our cost in some areas that we have already mentioned, and we improve our product mix.
So with these three factors and three levers that we have, we try to do whatever best we can in terms of the margin profile. In terms of EBITDA percentages, it can change because if your raw material prices go up, typically, our finished product prices go up, and then the EBITDA margins might look a little bit lower. And conversely, if your finished raw material prices come down, your finished product prices also come down, then your EBITDA margins look higher. So I think in terms of absolute profitability, based on the sales volumes that we do, would be a good metric for you to understand how the business works. And we believe it's sustainable at where we are at with the continued effort to improve it going forward.
So maybe per kg or per ton metric, is that not going to be as volatile on those metrics versus the percentage margin? That's what you're asking.
Correct. Correct.
But sir, there have been years when I can see history where the absolute profitability of the business has gone down substantially. So I don't have the numbers to go on the per ton basis how the profitability went. But you may not be the management at that time, but maybe I think 10-15 crores was the EBITDA in one of the years. So that which was pretty deep in terms of negatives. So you don't see such scenarios happening in this business now? So that's what I wanted to understand.
I think you can answer your own question by looking at the overall industry, what has happened. So if you look at specifically Styrenix or whatever name it was in its earlier avatar, you can understand how they were performing vis-à-vis competition. While overall competition seems to have performed better, this company in its earlier avatar has performed a little bit poorer, specifically for the years that you have mentioned. Now, overall, of course, as the volumes have gone up, all the players in the industry have got some benefit on operating leverage, and overall, the spreads have improved somewhat. But this is still a very normalized scenario today that we are at. So we don't anticipate any such dips currently because we have all factors such as competitive pressures in terms of global demand supply scenarios.
All of these are sort of normalized and have been for the last several quarters, and we don't anticipate that to change.
Yeah, so the point to take is some bit of management issues were also responsible for those years where the profitability was lower.
I won't comment directly on that. I hope you can appreciate it.
Got it. Got it. So sir, one more clarification I wanted to understand because you said in the opening question that the global spreads have remained more or less there. But is there any change on the India side of it? The domestic business sees a better scenario for spreads somewhere because of the freight issues that are there?
Could be. But again, my comment will be speculative in nature, which I shall refrain from making at this stage.
Okay. Got it. Thank you so much.
Thank you. Next question is from the line of Akash Chetan from Credent Asset Management. Please go ahead.
Yeah. My question is on the realizations. So I wanted to understand, basically, realizations per kg has jumped from around INR 126 to INR 145. So what triggered this? And are these the kind of realizations we can expect going forward?
I mean, raw material prices have gone up, and so have the finished product prices. So overall, prices have moved in tandem with raw material prices. If you look at, again, the overall profitability per ton, whatever, there are some slight improvements over there. And that is, like I said, on account of operating leverage and some cost savings that we have achieved. But of course, they are not of the same order of magnitude that you have mentioned because just looking at a price is not going to be able to tell you the whole story.
Okay. Got it.
Yeah.
Thank you.
Thank you. Next question is from the line of Nilesh Saha from Julius Baer. Please go ahead.
I don't know how to take care of the system. I have given a few.
Hi. Are you able to hear me?
Yes. Please go ahead.
Hello?
Yes.
Yeah. Hi. Are you able to hear me?
Yeah. We are able to hear you, sir. Please go ahead.
Okay. Great. Great. Just one question from my end, right? So in your earlier calls, you have made a comment that something like 65%-70% of the ABS that is sold is sort of specialty grade, which we understand is a customized grade that you are supplying to a particular OEM, could be an auto or appliances OEM, to meet certain features on strength, durability, right? Could you comment on the nature of those contracts, right, from a realization and pricing point of view, right? The reason I'm asking this is because I'm trying to better appreciate why the spreads are a bit volatile. I'm sort of struggling to understand that at least for this piece, your realization, what would be the dependence of your realizations for this piece on global ABS prices? That's my question. Thank you.
Okay. Since we at Styrenix, since we have taken over management control in November 2022 and having more kind of control over the business, say, in the quarter post that, in terms of spreads that you see, there is an incremental improvement on an annualized basis. But the volatility that you're alluding to is probably more to do with pricing rather than with spreads. There has not been a lot of volatility since the situation has normalized as far as the global markets are concerned. So we don't see a lot of volatility here. When we talk about specialized ABS or specialized or customized products that we give to customers, it's very difficult for me here to tell you how those spreads work because there are thousands, if not more, SKUs which are made as per the need of that customer.
Depending on the complexity of the product grade that needs to be made, the spreads can vary quite significantly. In terms of ABS, we sell ABS based on, obviously, its base properties, which is impact strength. It is chemical resistance. It is tensile, ductility, processability. But then, of course, we can make high-heat ABS. We can make electroplating ABS, paintable ABS, super high-impact ABS, high-gloss ABS, and anti-static ABS, UV-resistant ABS, and many such properties can be imparted to the product based on how you customize it, how you produce it. Even within that, there are hundreds of colors which can be produced and hundreds of additional properties which can be imparted to the ABS. Should we go into detail and explain to you how each of these grades, how the realization is virtually impossible?
I'm just generally asking the nature of the contract. So is it based on the sort of pricing of ABS plus a markup, or is there a linkage of the global ABS spread or ABS price that I observed? I was more sort of I wanted a qualitative color on the nature of the contract, not anything specific to do with the various products you must be selling.
Yeah. So it would be in line with a kind of a cost-plus basis, right? So depending on what my input costs are on raw materials, and those raw materials would be determined by publication pricing, which is ABS, as you correctly pointed out. Beyond that, whatever the difficulty or complexity is, would be added on in terms of margin.
Right. Right. And then these have some sort of a reset frequency, right?
Yeah, so these are decided on a monthly basis because the pricing on raw materials changes on a monthly basis, and so would our contracts reflect that.
Okay. Awesome. Thanks a lot. Thank you.
Sure.
Thank you. Next question is from the line of Aditya Khetan from SMIFS. Please go ahead.
Yeah. Thank you, sir, for the opportunity. So my first question is onto the ABS part. Sir, is it possible to quantify what would be the utilization level of ABS we have operated in this quarter and in FY24 and similarly in polystyrene?
So you.
Sir, sorry to interrupt you. We have lost your audio. Can you hear us?
Mr. Khetan?
Sir, sorry to interrupt you. We lost your audio. Can you repeat the answer?
Yeah. I'm asking, is Mr. Khetan referring to capacity utilization when he talks about utilization?
Yes, sir. Yes, sir. Capacity utilization.
Capacity utilization is near full utilization every single quarter. Like I mentioned, when we do de-bottlenecking, we realize there is a scope for additional volumes which can be produced. Now, de-bottlenecking is a very broad catchall term that we are using. We also do process improvements. We also do technology improvements along with that. That helps us realize higher volumes. That's a continuous exercise. We are at any point of time operating on full capacity at that particular point in time, or have been for the last five quarters.
Got it. Sir, onto the ABS, sir, when we look at the data for the past two years and today, we have witnessed that the ABS spreads have gone up by almost 30%-40%. So now you are saying that the global spreads are almost in line as compared to last year. But the data suggests that, so currently we are trading at around 30%-40% premium in terms of spreads. And that is also reflected in your numbers. So just wanted to know this improvement in spread is only because of the shipping cost or the ocean freight or there are some structural changes which is happening. Either it could be because of lower imports from Korea or any other factor which you can allude to.
We can take this question offline because I think your data and our data is a little bit different. See, basically, when you compare spreads, the only data which is normally available at a global level is your general injection molding ABS grade. If I track the spreads on general injection molding ABS grade and I have that entire data for the last two years, there is absolutely no change. So when you say it's increased by 30%-40%, we can take this question offline and we'll be very happy to answer it for you.
Got it, sir. Sir, onto the ABS, sir. You had mentioned so we are also funding the capacity. Any sort of a CapEx figure we have outlined? So from 85,000 tons taking this capacity to around 2 lakh tons, what would be the CapEx figure?
So like I mentioned, in this year, we are targeting about 105,000 tons or 100 to 105,000 tons of ABS. We are in line to do that, to go from 105 to 210,000. And of course, Polystyrene also to go from 100 to 150,000 tons. We have outlined an overall CapEx guidance of about INR 650 crores. We'll have detail on that very shortly. So hopefully, in the next few months, where we will know exactly what will be the cost and how much would be the spend over the next few years and in which quarters. So that detailing has yet to be done. But that was broadly the number which we had given earlier, and that remains to be the case until we get more detail from our engineering studies.
Got it. And, sir, just one last question. Sir, onto the other expenses, the benefit which we have got in this quarter, so this we can assume it for the full fiscal FY25?
Again, there will be a function of product mix. There will also be a function of specific seasonality in certain quarters. There could be factors which can help us. But you see, there is an overall base spread which doesn't change too much or is not very volatile. There could be certain temporary or momentary changes which may happen. Like I said, we have not given any guidance, but you can consider whatever is happening currently as the normalized sustainable scenario.
Got it. Oh, thank you, sir. Thank you.
Yeah.
Thank you. Next question is from Dhara Patwa from ValueQuest Investment Advisors. Please go ahead.
Thank you for taking my question. So my first question is on getting more clarity on the debottlenecking exercise that we're doing. So I just want to understand this will open up how much capacity for us? Is it like 60,000 tons? The reason why I'm asking this question is because we face capacity constraints before our doubling of capacity comes in FY28. If you can help me clarify this?
Prior to us taking over management, the capacity of ABS or the maximum production or sales of ABS based on own-produced products was close to around 65,000 tons, which last year we did about 90,000 tons of ABS. This year, we are targeting between 100-105,000 tons of ABS. This is all by virtue of de-bottlenecking. Going from 105 to 210 is the larger kind of long-tail expansion which will help us double the capacity. How fast it can happen, whether it can happen in a modular fashion, and what will be the exact dates of commissioning, we'll give more information on that. Initially, we had given a broad guidance of 28, but we believe that it can be done sooner, and we'll have exact information in the next few months on that.
When you mentioned sooner, does it mean that it will do it in a phased fashion or the entire capacity needs to come online at one time? Can it be?
I think we'll have to wait for a month or two to share that information. Once we have it, we'll share that with you.
Okay. And what would be the total capacity? ABS, SAN, Polystyrene, and blends, all the capacity put together, what is the total capacity that we have today?
So right now, it's going to be about 200,000 tons for the full year. And I think we have given that guidance as well, where we have mentioned 200,000 tons for this year. And the increases also we have demonstrated or kind of indicated in the last few investor presentations ago. So you can refer to that, and that number will still remain valid as far as our current planning is concerned.
Okay. Sure. Thank you, sir. Thank you very much.
Yeah. Most welcome.
Thank you. Next question is from Pratik Singhania from SageOne Investment Managers. Please go ahead.
Yeah. Hi, sir. So with respect to Aditya Dhara's question, with respect to the existing capacity in last quarter's presentation for ABS, it was mentioned that the existing capacity is 85,000 tons, and for PS, it is 66,000 tons. But because of your internal efficiency and process measures, you said in FY24, you did a total production of 90,000 tons, right? So, sir, similarly, for end of Q1 FY25, because of your own process improvement, what is the monthly or quarterly production capacity? Not the stated one, but the capability of the company to manufacture a tonnage of ABS and Polystyrene per quarter, how it would be?
So whatever we have produced in this quarter is the maximum that we can produce, okay? In the next few quarters, there is de-bottlenecking which is happening on ABS, which will help us produce more. I think on the overall annualized basis, we are still on track to reach the number that we have mentioned, which is about 100-105,000 tons.
Right, so basically, in terms of number, if I can assign a number because I'm asking the historical number, so at the end of this Q1 FY25, what would be the capability in terms of it would be similar 22,500 tons per month per quarter for ABS?
If we are talking about producing 105,000 tons, that number would be a little bit higher, right? It would be closer to 25,000 tons or 26,000 tons. That is what, in fact, is the current capacity.
Okay. So we have already de-bottlenecked the ABS capacity to 105?
No, we have not. We have done it, but we are very close to it. Balance part of it will be done in the next quarter, and then we'll reach that exact number.
Okay. And, sir, currently, what is our HRG capacity? How much we can produce per month?
So HRG capacity is 24,000 tons, and that is currently the case. Again, there will be some de-bottlenecking over there in the next quarter, which will help us produce more HRG.
10%-15% de-bottlenecking can be achieved over here?
Yeah.
Okay. And, sir, when we'll be saying that we'll be adding the capacity for ABS by de-bottlenecking, so we will not be sacrificing on our SAN tonnage, right? It will be incremental volume that will be added. Or do you have to?
No, that is correct. SAN, we have, in fact, additional capacity already in place. So we will not have to sacrifice any SAN tonnage.
Okay. And, sir, similarly, if you can tell me about Polystyrene, like 66,000 tons, is it still at 66,000 tons per annum, or you have done some kind of a de-bottlenecking for it to have some midpoint of, say, 80, 85 thousand as of now?
SAN is currently at that capacity, what you have mentioned. In the next quarter, that de-bottlenecking exercise should be completed. On an annualized basis, of course, it would be 100,000 tons. For this year, because of some time lost during the de-bottlenecking exercise itself, the overall capacity of the HIPS, like you mentioned, would be or polystyrene would be around 75,000-80,000 tons.
Okay. Okay. Great. And, sir, best wishes because increasing 8,000 tons incrementally YOY at an incremental fixed cost of just INR 5 crores net is commendable. All the best, sir. Thank you.
Thank you.
Thank you. Next question is from Kunal Shah from Enam Investments. Please go ahead.
Hi, sir. Congratulations on the good set of numbers.
Thanks.
Yeah. I have one question on ASA. Can you help me understand, you have the raw material mix that ASA is required to make ASA? And also, on ASA, have you already started selling it in the market, or are we still in the customer approval phase?
So, Kunal, ASA is composed of a different kind of rubber, which is used, which will basically like you have ABS composed of HRG and SAN for that matter. Similarly, for ASA also, you would have ASA rubber, which would be its own kind of rubber, specialized rubber, along with SAN and SAN. So it would be similar in terms of percentages that would be used. The rubber part, again, is something which we have developed, and we would be partly using our own, partly buying from outside as well. The SAN and SAN pieces, of course, are pieces that we already have in-house available to use. So that's ongoing. In terms of customer qualifications and validations, we have received some validations, and some commercial orders have started.
But these are still quite small, and we believe that the real benefit potentially will come towards the last quarter of this year.
Got it. Got it. Great. Great. Thank you so much, sir.
Yeah.
Thank you. Next question is from Hemant, Individual Investor. Please go ahead.
Hello.
Yes.
Thank you for providing the opportunity, and congratulations on a very good set of numbers. My question is pertaining to the stake sale by the promoter. So if the prospects of the company are good and the future is very, very bright and promising, why is there a stake sale by the promoter?
So a few things. Hemant, why is our agent trapped here? Yeah. Hemant, can you mute your line from your side, please?
Sir, your voice is cracking.
Hemant, can you mute your line from your side, please? Thank you. Sir. Yeah. Hemant, in terms of the functioning of the company or prospects of the company, they remain very much in line with whatever we have been speaking about and what we believe. So that does not change. The stake sale is, frankly, a decision taken at the promoter level, which is considering the promoter's own options to retire certain debt, which was taken for the acquisition of the shares itself. And there was, of course, a pledge also created as a result of that debt. We believe that in the interest of the company, in the interest of the shareholders, as well as the interest of the promoters, it made sense to dilute some equity so as to alleviate that part.
And that is a decision that the promoter group has taken. Of course, it does not really have any bearing, per se, on the operations of Styrenix for which we are talking about here. But to answer your question, I hope that that addresses your concerns.
So, sir, you mean to say that some debt was taken by the promoter in acquiring the company? And the stake sale was basically done to retire that debt?
That is correct.
Okay. Fine, sir. Thank you.
Yeah.
Thank you. Next question is from Tushar Vasoja from Yogya Capital. Please go ahead.
Hello. Am I audible?
Yes, Tushar.
Yes. I have a few questions, and I'm a bit new to your company, so I'm sorry if they're a bit rudimentary in nature. But my first question is, can you give a revenue distribution based on the end industry that you serve?
So, Tushar, we produce two lines of products broadly: ABS and Polystyrene. In ABS, we cater to the automotive industry. We cater to household appliances or large appliances, electronics, medical devices, small appliances, stationery toys. Generally, the revenue mix is about 40% in automotive, similar percentages in household appliances. And then the other industries are, of course, smaller in nature. Polystyrene, on the other hand, again, is about 40-odd% in household appliances, similar percentage in packaging. And then the other industries is where we have the rest of the sales.
Okay, sir. Thank you. And another thing that you mentioned a lot about de-bottlenecking. And you also mentioned a CapEx of 60-70 crores or somewhere about that for this year. So does that include the cost for the de-bottlenecking, or is it completely different expansion?
That's included.
Okay. That's included.
Yes.
Okay, and I'm asking a bit of a broad question because how have things changed for the company since the management has changed?
So we believe that the company has a very bright future in terms of growth prospects. I think that is one kind of management philosophy which has got reinstilled in the company and its management team. And in line with that philosophy, a lot of changes have happened in terms of product efficiency, in terms of projects that we are doing, in terms of customer relationships. So the entire kind of organizational structure, organizational part of the organization of the company has changed and is more geared towards ensuring that we grow.
Okay. That's fair enough. Thank you for answering all my questions.
Sure.
Thank you. Next question is from Prateek Shera from Lucky Investment Managers. Please go ahead.
I have two questions. And I think I'll answer those two. So one on the freight side and the price increase. Can you hear me?
Yeah. Go ahead, Prateek.
Yeah. So on the freight side and the price increase, so what I happened to check with the traders was that in 2022, where the prices of ABS have gone up on the freight, and you were, in short, to mention the RM-related price increase or the bulk freight price increases and the price increase, which has slowed down. But you didn't comment on the freight-related finished goods price increases, which have slowed down in the month of June or the latter half of the month of June. Should we see that slowing down now in these quarters which are going to come by? That's the first question, and my second question on the power and fuel cost, whatever projects you're implementing, can you quantify the absolute EBITDA range benefit on account of this power and fuel cost?
Should one assume over and above this INR 19 a kg EBITDA, which slowed in the quarter one of this year?
So the overall ocean freight changes, which have happened in the Far East, which has an impact on finished goods and the market in India, is not reflected in the June quarter. There could be some impact of it in the current quarter. Of course, it would be speculative of me to comment on that, but this is data you can independently verify as well. With regards to your second question, which is on utility cost, which is power and fuel, I think there are a lot of projects, like I mentioned, on fuel where we are commissioning alternate fuel source utility operations, which are going to happen in this month and then consequently after two, three months as well. So all of this is going to lead to an EBITDA improvement.
Again, we haven't given a guidance on exactly what that percentage will be, and it will be premature for me to do that right now because we have to understand exactly what that will entail at full capacity utilization. But you will see the benefit of that incrementally, I think, from next quarter and in the full year for next year, for sure.
Are these benefits material? Are they a couple of % type margin improvement? Can you give that kind of indication?
So just to give you an idea, when we produce fuel using natural gas, our cost is around INR 6, INR 6.50 a kg. When we use certain alternate fuels, the cost per kg can come down to as low as INR 2.5-INR 3. So if you calculate and correlate that to overall fuel cost, you can see that it is fairly material.
Oh, perfect, so basically, freight-related benefits have not slowed in quarter one, is what you're concluding. They can come incrementally in quarter two onwards, and then you have the power and fuel cost saving to be written over the quarter one number. That's a takeaway point.
Right.
Okay. Thank you very much, sir.
Sure.
Thank you very much. Ladies and gentlemen, we will take that as the last question. I'll now hand the conference over to Mr. Chintan Doshi for closing comments.
Thank you, Investors' Communities, for joining the call and showing interest in the company, and we look forward to answer you in the next investor call, which will be announced at suitable time in future. Thank you.
Thank you very much. On behalf of Styrenix Performance Materials Limited, that concludes this conference. Thank you for joining us, and you may now disconnect the lines. Thank you.