Margin rebounds, but Supreme Petrochem shares fall 4.87%
Revenue grew faster than expenses sequentially, but the stock's reaction was unusually weak despite the sharp earnings recovery.
Filed 24 Apr 2026, 20:18 IST · after market close · Supreme Petrochem Ltd (SPLPETRO)
Key takeaways
- Consolidated operating margin rebounded 10.37 percentage points sequentially to 15.90% as revenue grew 25.35% while expenses rose 11.59%.
- Net profit increased 450.05% sequentially to EPS of Rs 8.97, even as the tax rate rose 1.49 percentage points.
- The stock fell 4.87% on result day, far below the 1.00% median absolute move after its last eight results.
Price around the results
Q4FY26 delivered a sharp sequential earnings rebound
Supreme Petrochem's consolidated revenue rose 25.35% sequentially, while expenses increased 11.59%, lifting operating profit by 260.67%. That operating leverage expanded margin by 10.37 percentage points to 15.90%. The improvement followed the 5.53% margin recorded in Q3FY26.
Operating improvement outweighed raw-material disruption
Management said styrene monomer prices rose sharply in March after the Strait of Hormuz blockage, while Middle East suppliers could not ship material during the month. Despite that disruption, expenses grew much slower than revenue sequentially. Other income contributed 3.38% of pre-tax profit, and the 1.49-percentage-point rise in the tax rate means the profit recovery was not driven by a lower tax burden.
Margin recovered from its Q3 low but remains below peers
Operating margin declined from 8.30% in Q1FY26 to 7.04% in Q2FY26 and 5.53% in Q3FY26 before the Q4FY26 rebound to 15.90%. The margin was 2.87 percentage points below the 18.77% median for the 51 Commodities peers that had reported the quarter. Supreme Petrochem ranked 19th from the bottom on this measure.
Capacity additions and integration remain in focus
Management said the first mass ABS line was commissioned at the end of September 2025 and production has started. It also said EPS capacity at Amdoshi was raised from 85,000 MTA to 115,000 MTA and commissioned on April 14, 2026. The company told analysts that Xmold Polymers' integration with its SPC business was progressing, while FY26 sales volume rose 2.0% and utilisation exceeded 80% across products.
The market reaction was much weaker than usual
The shares fell 4.87% on the first trading day after the results and were down 9.94% after five sessions. That compares with a 1.00% median absolute move across the stock's last eight result reactions, during which it rose three times and fell five times. The results were filed after market close on April 24, 2026.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ |
|---|---|---|---|
| Revenue | ₹1,606 cr | ₹1,281 cr | +25.35% |
| Other income | ₹8 cr | ₹2 cr | +356.14% |
| Expenses | ₹1,350 cr | ₹1,210 cr | +11.59% |
| Operating profit | ₹255 cr | ₹71 cr | +260.67% |
| Operating margin (%) | 15.90% | 5.53% | — |
| Interest | ₹4 cr | ₹4 cr | +0.24% |
| Depreciation | ₹28 cr | ₹27 cr | +2.76% |
| Profit before tax | ₹231 cr | ₹41 cr | +461.27% |
| Tax | ₹62 cr | ₹10 cr | +494.09% |
| Net profit | ₹169 cr | ₹31 cr | +450.05% |
| EPS (₹) | ₹8.97 | ₹1.63 | +450.31% |
Operating margin of 15.90% compares with a Commodities sector median of 18.77% across 51 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -4.87% | -5.69% |
| Next session | -4.05% | — |
| 5 sessions | -9.94% | -10.50% |
| 15 sessions | -12.96% | — |
| 30 sessions | -16.76% | — |
Volume on the results session was 1.21× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- FY26 sales volume increased 2.0% to 363,203 MT from 355,967 MT in FY25.
- Capacity utilization for all products was over 80% for the year based on available effective expanded capacity.
Guidance & outlook
- The company has arranged sufficient material through alternate sources to meet full domestic demand in the coming months.
- The company expects the raw-material situation to ease once normal ship movements through the Hormuz Strait resume after a ceasefire.
Expansion
- The first mass ABS production line was commissioned at the end of September 2025 and production commenced.
- The Amdoshi plant's EPS capacity was increased from 85,000 MTA to 115,000 MTA and commissioned on April 14, 2026.
New initiatives
- The company acquired Xmold Polymers, a Tier II supplier of engineering polymer components to automobile and appliance manufacturers.
- Integration of Xmold with SPL's SPC business is progressing well.
- SPL set up a 12.5 MW solar power plant in a joint venture with Tata Renewable Energy Ltd.
Problems & risks
- Styrene monomer prices rose sharply in March 2026 after the West Asia war because of the Strait of Hormuz blockage.
- Average styrene monomer prices were about 17% lower year on year, resulting in lower revenue despite volume growth.
- No material could be shipped by Middle East suppliers in March 2026 because of the West Asia war and Hormuz Strait blockage.
- The mABS plant restarted at 65% of design capacity while impacted equipment is repaired and restored.
What to watch
- Whether consolidated operating margin holds above 15.90%.
- Whether the mABS plant can operate above the 65% of design capacity reported during equipment repairs.
- Whether the Amdoshi EPS capacity operates at the commissioned 115,000 MTA level.