Styrenix Performance Materials Ltd (NSE: STYRENIX) Q3 2025 Earnings Call dated Jan. 31, 2025
Corporate Participants:
Bhupesh P. Porwal — Chief Financial Officer
Rahul R. Agrawal — Managing Director
Chintan Doshi — Manager, Legal & Company Secretary
Analysts:
Rahul Agarwal — Analyst
Aditya Khetan — Analyst
Nirav Jimudia — Analyst
Pritesh Chheda — Analyst
Unidentified Participant
Aashish Upganlawar — Analyst
Ajay Sharma — Analyst
Anand Mundra — Analyst
Siddharth Purohit — Analyst
Chirag Shah — Analyst
Rohit Ohri — Analyst
Krunal Shah — Analyst
Presentation:
Operator
Is now being recorded ladies and gentlemen, good day and welcome to Styrenix Performance Materials Limited Conference Call. We have with us today from the management of Styrenix Performance Materials Limited, Mr Rahul Agarwal, 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 the conference call, please signal an operator by pressing star zero on your touchstone phone. Please note that this conference is being recorded. Further, on behalf of the management of the company, we would like to remind the participants that this call is being conducted, subject to and in-line with the disclaimer mentioned in the investor presentation as-is available on the stock exchange. I now hand the conference over to Mr P. Purwal. Thank you and over to you, Mr Purwal.
Bhupesh P. Porwal — Chief Financial Officer
Thank you. Ladies and gentlemen, no must day, everyone. I am pleased to welcome you to our Q3 and the period ended December ’24 conference call. As we reflect on our performance in the fiscal year 2025, I am delighted to announce that we have witnessed a robust demand for our products for nine months of FY ’25 marked — marking a significant significant growth trend. Coming on to the financial performance of Q3 sales volume for Q3 was 47.5 kt versus 41.8 kt in Q2 FY ’25, that is an increase of 14.5% and by 34.4% compared to Q3 FY ’24, which was 35.6kt. Revenue stood at 691 cr in Q3 FY ’25 versus 65 cr in Q2 FY ’25, that is increased by 6% and increased by 42.5% compared to Q3 FY ’24, which was 485 cr. PPDID stood at 75.4 cr, that is at 10.9% versus 105 cr, 15.9% in Q2 FY ’25 and 60 cr, that is 12.3% in Q3 FY ’24. PAT stood at 47.7 cr in Q3, 26.3% versus 70.1% CR 10.6% in Q2. For the YTD FY ’25 highlights, sales volume for YTD December 2024 stood at 137 KT versus 120 KT in YTD December ’23 that is, it has increased by 14.3%. Revenue stood at 2043 cr versus 1623 cr, that is increased by 26% compared to YTD December ’23. PPDIT stood at 273 CR, that is 13.3%, which is better by 1.1% compared to YTD December ’23. PAT stood at 179 cr, that is 8.8%, which is better by 1.1% compared to YTD December ’23. We expect Q4 to be averaged based on the historical industry needs. Industry trend, sorry. Had entered a FPA with Group GMVH on 9th of December ’24 for acquiring 100% shareholdings of Ineo Style Mission Thailand Company Limited located in Thailand. The acquisition transaction has been successfully completed on 17th of January to 025. Standing performance Material is now holding 100% control and shares of Ineos Thailand Company Limited through its affiliates and subsidiaries. The new name of the company has also been changed effective today and now it will be called Performance Materials Thailand Limited. We had also announced about our debottlenecking exercise and expansion plants in October ’23. We have completed debottlenecking activity at our plant in the last quarter, which we have discussed. And in this quarter, we had completed at our Nandesi plant increasing the rubber capacity up till 27kt. We had announced about our expansion plan in October ’23. We are also significantly accelerating our plant brownfield expansion in ABS and aim to add as part of Phase-1 50 KT ABS capacity by middle of 2026 itself, which in our earlier plan was 2028. Phase-2 to add another 50 KT of ABS will follow and is expected to be commissioned ahead of the schedule. This is all about highlights for the quarter and period ended December ’24, and now we may proceed to answer the questions you may have. Thank you very much.
Questions and Answers:
Bhupesh P. Porwal
Thank you. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on touchstone 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 a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. The first question comes from the line of Rahul Agarwal with Ike Guy Asset Management. Please go-ahead.
Rahul Agarwal
Yeah, hi, very good afternoon. Thank you for the opportunity. Sir, one question was, firstly, congratulations on the acquisition. It seems like a good-quality asset at a reasonable price. Could you help us understand the longer-term thought process on this asset, please in terms of how do you want to grow this business from here on and what could be the return on investment we can expect overall on the entire asset, please?
Rahul R. Agrawal
Okay. Hi, Rahul. Thanks. This is Rahul Agarwal also. Now in terms of the Thai assets, there are multiple synergies that we have with the current business in India. As far as the product profile is considered — is concerned in Thailand, we are adding few technologies in the Thailand business, which we did not have in India. For instance, we shall have access to certain extrusion grade ABS, which can be used to make also refrigeration liner grade ABS, which is unique to the plant in Thailand. There is a large market for in India, which is currently served by imports by with this acquisition, we get access to that technology, which is a significant development. We also get access to certain water clear sand or high chemicals in sand, which is again produced specifically in the Thailand plant and is not commonly produced elsewhere in the region. We also get another bimodal rubber technology, which can use for certain applications which are under the low-temperature ductility kind of applications. So all-in all, there are multiple uses for — new uses for the technologies, which would be coming in from the Thailand facility, which can help expand our product profile in India. There is, of course, a capacity also which we are getting. There is a rubber capacity of about 31,000 tons, a total ABS capacity of around 85,000 tons and a sand capacity of 100,000 tons. Salon, of course, if it is utilized to make ABS, the sale available-for-sale would be reduced by that extent. However, the capital — the asset is unutilized. As you may have seen from the investor presentation, we did about 74 or did about 74,000 tonnes of sales last year in the calendar year. So overall, if you look at ABS and SAN and exclude the used for ABS, the total capacity would be to the tune of 125,000 tonnes. So we have obviously some headroom to grow over there. We get access to all different new markets as well. There are already a fair bit of qualifications which have been done from product in Thailand in very key markets and key sectors like automotive industry, household appliances in China, in Vietnam, in Indonesia, in Thailand, in Japan, in Korea, and we get access to all these markets also now. There are qualifications done with OEMs over there, which can also benefit us in India and vice-versa. So I believe there are multiple synergies with this business, which can be exploited and explored over a period of time. We do believe given the capacities we can achieve similar kind of a capacity utilization levels in Thailand that we have in India over a period of time, given our strengths, which already exist in India and in Thailand. How that will finally result into a return of investment is a little early to give you exact numbers on that. But we believe at the — considering the cost of acquisition is to be highly-attractive and you know, it should be a very rewarding acquisition for the company and its shareholders.
Rahul Agarwal
Got it. So to understand this correctly, this is an operational plant and we’ll just whatever new additions on product side will do, we’ll see numbers adding up on the consolidated numbers starting 4th-quarter of fiscal ’25, is that understanding correct?
Rahul R. Agrawal
That is correct.
Rahul Agarwal
Okay, perfect. And secondly, the question was on the India business. It looks like the margins could have been better, I thought. So just your assessment on the 3Q margins and the outlook for next six to 12 months.
Rahul R. Agrawal
Thank you. So the margins in the second-quarter, which was in September were a little bit higher on account of some extraordinary gains we had in that quarter. There were certain supply-chain disruptions in that quarter on account of certain freights, which I had alluded to in the last call as well. Those have normalized. So those margins would not be the good benchmark to take. But if you consider year-on-year, our spreads, so to speak, are still quite healthy and they are in-line with what we have done. In fact, we have done better if you look at year-on-year. Overall, on a blended basis, we have had higher sales of polystyrene in the last quarter compared to what we have had in the previous year. So as a percentage of overall volumes, polystyrene might have contributed a higher percentage and hence polystyrene having slightly lower margins historically, you know the overall margins might look lower, but net-net, the way we look at it, our spreads are still very much intact and only growing.
Rahul Agarwal
Got it, Rahul. I have more questions. I’ll get back-in the queue. Thank you so much.
Rahul R. Agrawal
Thank you.
Operator
Thank you. Next question comes from the line of Adity Khetan with Institutional Equities. Please go-ahead.
Aditya Khetan
Yeah. Thank you for the opportunity. Sir, my first question is with respect to this Thailand acquisition. Sir, we are witnessing like in terms of sales volume from 2021 to ’24, there is a continued drop. And in 2023, EBITDA also was in losses. Any particular reason because when we look at the global markets or the spreads were healthy like for the last two — so two to three years. Any particular reason why this business was struggling?
Rahul R. Agrawal
So in ’21, of course, Aditya, the globally all the polymer producers, including ABS producers globally had unusual windfall profits and the margins and spreads were very-high. In fact, the last two years, the years that you are alluding to, the global margins have not been very good. Of course, we have done much better in India, but the spreads across Asia or Europe or the US for that matter have not been very healthy. And you know the spreads in, of course in Thailand also have not been very, very healthy you know but we — I think the fact is that we have done some things differently in the Indian business and we do believe that we can do similar things in Thailand as well after a period of time.
Aditya Khetan
But sir, any sort of a particular — so negative like — so wasn’t the product fit for the market or any sort of a change like which has happened into that business, which is why it was so not performing well.
Rahul R. Agrawal
So I would ignore ’21, you know essentially where the revenues were much higher account of much, much higher prices due to the supply-chain disruptions. If you look at the last three years, yes, ’22 revenues were a bit higher, but they kind of normalize, if you will, for that part of the business going to ’23 and then ’24, in fact, there is a — there is a slight upside as well. So the revenue has grown again from ’23 to ’24, coming back into a positive territory and in the right direction. So ’23 was of course a tough year for everyone globally and the Thailand was no different over there. The product mix per se has not changed over there. I think overall sales volumes were a bit lower. As you can see, sales volumes had reached a high-level of 105 KT in ’21 and then they dipped down to around 65 KT odd in ’23 and then they moved up to 75 KT again. And obviously from this point on, we do believe there is room to grow the business further in terms of volumes.
Aditya Khetan
Got it. Sir, my next question is, sir, when we look at your new capacities like which you have debottlenecked on polystyteen and on EBAs, sir, the additional volumes hasn’t like flown through your EBITDA numbers, like it has — the spreads have actually dropped. This is also related to higher increase in other expense. So this operating leverage benefit hasn’t played out yet and you expect this to come in the coming quarters? And what is the reason for this higher other expense?
Rahul R. Agrawal
Yeah. So I’ll speak to in terms of spreads. See, the overall spreads are still intact. If you look at, in fact, nine months, our spreads are much higher, you know, in the overall business, which have been historically the case. And of course, some of it I’ve also alluded as — and I have mentioned explicitly that is due to certain extraordinary gains we had in the second-quarter. But all-in all, if you look at an average time in terms of spreads, the spreads haven’t really gone down. In fact, they have only increased. Again, I’m repeating myself where I say that in the 3rd-quarter, we have had higher polystyrene sales. We did debottlenecking of polystyrene in the second-quarter, which is why polystyrene sales were lower in that quarter. In the 3rd-quarter after debottlenecking polycerin production and volumes came up. We are a supply-constrained kind of a company where we are limited by the amount of production we can make. So once the production came online, we have been able to sell more of the product available to us in terms of polystyrene. In terms of ABS, again debottlenecking has only been completed for our rubber plant as of end of December and those benefits would come online perhaps in this quarter and the next quarter. So on an annual basis, I think the spreads are fine and we don’t see any major concern for that. Other expenses, again, you know, if you look at fuel or utility and those kind of costs, we do see a reduction. We do see an operating leverage over there. There could be some specific expenses, which may have, you know, changed a little bit, but otherwise there is no significant variance.
Aditya Khetan
Got it. Sir, just one last question, sir, what would be the peak potential revenue we are expecting from the Thailand plant? And secondly, like how are we — onto the standalone business, so we are maintaining our volume growth guidance of 15% to 20%.
Rahul R. Agrawal
That is correct. Or for India business, we are maintaining the volume growth guidance. We never given guidance, but we have always told you that we are increasing our capacities, debottlenecking our plants and in accordance with how the volumes would be available to us, our sales would grow and we are maintaining that even now. So as our debottlenecking and additional volumes have become available to the company for-sale, we are being able to convert that into sales for the farm. So that is still on-track, very much so. As far as Thailand is concerned, I would take a queue from India business in terms of what volumes we do and what are the subsequent sales and revenues numbers associated with that. Thailand would essentially follow that as well as we are able to effectively completely utilize the capacities.
Aditya Khetan
Got it. Thank you, sir. That’s it from my side.
Rahul R. Agrawal
Yeah.
Operator
Thank you. Next question comes from the line of Chimudia with Annual Wealth. Please go-ahead.
Nirav Jimudia
Yeah, sir. Good afternoon. Sir, I have two questions. So one is on the EBI side. So when we look at rubber capacities here in India, which is now debottlenecked to 27,000 tons and which can now support our production close to around 5,000 tonnes of ABS. And when we compare our acquisition there, possibly the rubber capacity is 31,000 tonnes, but the ABS capacity is 85. So just wanted to ask you like, does the quality of rubber plays an important role because generally when we see here it’s like 0.25. But when we see our Thailand plant, it is slightly on a higher side. So one, if you can share your thoughts here in terms of on the rubber side? And secondly, let’s say, when we will increase our capacities of ABS further by close to around 1,000 tonnes, 50,000 tons of two-phase two phases is it safe to assume that we would need additional 25,000 tonnes of rubber capacities to support this? Thank you.
Rahul R. Agrawal
Yeah. Thank you, Nirav. So you’re right you know, the rubber that we produce in Thailand is a little bit different from the rubber that we produced in India. In the rubber that we produced in India also after we took our management control, as of November ’22, we did some improvements to the quality of rubber due to which we were able to get higher rubber efficiency here. In Thailand, of course, it’s not an exact comparison because it is a bimodal rubber, which supports kind of applications as well. So — and it also supports certain other kind of applications of the final ABS. So that rubber has its own properties and own qualities. Again, it depends on which grade we are making. There are specific grades that we produce in Thailand, which may require slightly higher rubber content. But yes, in terms of technological advantages and synergies that can be used between both the sites in terms of perhaps improving rubber efficiencies in Thailand, these are projects that we will definitely undertake and see if we can increase capacities even further from the kind of nameplate capacities of 85,000 tons that they have over there. As far as the expansion in India is concerned, for the 50 additional ABS capacity, you are right, there will be augmentation required in rubber, also in some augmentation in sand and compounding. So all of these things will be completed over the next 18 months. Some of the expansions may happen quicker in some of these cases, but the overall additional capacity of 50 KT will be available to us subsequently after 18 months as we have stated.
Nirav Jimudia
Correct. So sir, just wanted to clarify that in terms of our continuous innovation on the — on the rubber side, is it possible to further reduce those norms of rubber to ABS production when we will take-up those expansions or now we have already reached the peak innovation in terms of the rubber to ABS conversion and this could be taken as a norm going-forward.
Rahul R. Agrawal
So there is always room for innovation. That’s what I believe. However, we are — we have done quite — we have covered quite a bit of a distance in terms of improving rubber efficiency or quality in India. There still may be some room to grow, but you know, a large part of that has already been captured as of now.
Nirav Jimudia
Got it. And Sir, second question is on deposit side. So when we see like what we have seen is that we already expanded our capacities from 65,000 to 100 kT. And last-time on the conference call when we interacted, you mentioned that like there are approvals pending from the customer side, which would help us to A, grow the volumes from the application point-of-view as well as the normal growth, what we can see from the consumer durable side. So if you can share your thoughts here like from the approval side, specifically from the application point-of-view, where we stand at this point of time because once we receive that, this could straightaway give us the incremental volumes plus the normal growth, what we can envisage in terms of the growth in the consumer durable side. So your thoughts here?
Rahul R. Agrawal
Yeah. So essentially, as we spoke about last-time, we had a capacity of about 65,000 tonnes of polystyrene last year. In the second-quarter of last year, we augmented our capacities on polystyrene, thereby further enhancing our output of general-purpose polystyrene essentially to begin with. And we were able to expand that significantly with kind of approval investment that we did. We were able to achieve a higher output as of last quarter and hence, those additional volumes which came in were easily sold-in the marketplace. And that happened because of both the reasons that you’ve already mentioned because all the work that has gone in by our team in terms of validation was successful and we were able to get — we are able to get much larger share of OEM business that we were doing earlier. And also, you know, as you know, the normal growth is there in these sectors and applications that we cater to. So we are getting a benefit of both. Again, again to reiterate, we are finally constrained by the amount of product we can produce. And mostly all of the product that we are producing, we are able to currently sell.
Nirav Jimudia
Correct. Sir, two things here. So one, are there still some application-based approvals, which needs to be received from the customers? And also if you can break-up our PS capacities between GP and HI, that would be helpful, sir.
Rahul R. Agrawal
Yeah. So I mean, there are some approvals which have — which have already come through. There are approvals for certain grades which are still going on, which would still probably take maybe one or two quarters more. And what happens is even after the approvals are received, there is of course a slow ramp-up in terms of the demand offtake by these customers as they slowly start using these products in those applications for which they give us approvals. However, I think it suits us because honestly, we are kind of running quite high on capacity utilization. So as and when we are able to slowly increase the capacities to the level customers require them, I think we’ll be still in-line with demand as well as the supply situation. So that is all going on. In terms of GP and kind of high-impact polystyrene, you know, we were running at about 50-50. Today, the ratio might be close to kind of 65% 35%, where 65% could be general-purpose polystyrene and 35% would be high-impact polystyrene.
Nirav Jimudia
Thank you so much, sir. Just a last bit, because the application is predominantly the refrigerators and washing machines here for the polystyrene, how much of our total volumes would be spread across these two broader segments, if you can share?
Rahul R. Agrawal
It would be close to around — so it’s hard to give you for both the categories because again from HIPS and GPPS, you know the offtake in both the segments are different. However, at an average broader level, we can say around close to 40%.
Nirav Jimudia
40% each — for each of them, right?
Rahul R. Agrawal
Yeah. Overall, overall 40% would be in the durable sector.
Nirav Jimudia
Perfect, perfect. Thank you so much, sir, and wish you all the best.
Rahul R. Agrawal
Thank you.
Operator
Thank you. Next question comes from the line of Pritesh with Lucky Securities. Please go-ahead.
Pritesh Chheda
Yes, sir. I have two questions. So first on the operating metrics side. So between quarter one and quarter three, keeping the quarter two aside for the logistic benefit in the spreads. So between quarter one and quarter three for a similar volumes, the profitability is different in-quarter three versus quarter one. So quarter three is lower versus quarter one. And we have a setup of higher volumes and lower-power or lower energy costings via the fuel change on one-side and the higher contribution in the mix. So if you could just explain these two quarters, how should we read it in terms of the changes in profitability? Yeah. The volume is similar, we are at yeah,
Rahul R. Agrawal
Yeah. So in-quarter one, of course, the sales of ABS would have been much higher than in the case of quarter three. In-quarter three, the sales of polystyrene are much higher. There are two reasons for that. One is, you know, of course, we did debottlenecking for polystyrene in Q2 and that’s why we had to take a shutdown also in polystyrene in Q2. Hence, we have lower amount of product available in that quarter. Once the debottlenecking was completed, not only was the product available, it was available in higher quantities for Q3. Similar issue was in ABS. As you — as we already mentioned, we had kind of debottlenecking exercises done for rubber plant. So slightly lower volumes were available for ABS, in fact, in Q3, which now has been corrected towards end of Q3. So in Q4, again, the full volumes of ABS would also be available to us from our Lavaraba plant. So that is where we have had a kind of a mix. So overall, in terms of volumes, you will see higher volumes contributing in polystyrene in Q3 and in Q1, higher volumes contributing in ABS as the overall percentage.
Pritesh Chheda
So Q1 has higher volumes of ABS, Q2 has a higher-volume of ABS because of debottlenecking of polystyrene. Q3 has a higher-volume of polystyrene because of debottlenecking of ABS.
Rahul R. Agrawal
Correct.
Pritesh Chheda
Okay. Okay. Understood. And what happens to the energy-saving or the fuel change across plants because you had started the year with only one plant. So where are we on that and the 200 basis-point savings on it on the margin side?
Rahul R. Agrawal
Yeah. So 200 basis-points is not something which I have ever kind of extended or specified. It has been inferred by everyone, but there is definitely a saving. We are moving in the right direction over there. We see a utility saving in the Q3. We have completed, as you know, the fuel saving exercise largely also in Dahej plant, which is a polystyrene plant with higher throughputs, which we have seen in the last quarter and consequently, of course, we will see even higher throughputs in Q4 in polystyrene, those, those savings will be significant, which details will be available, of course, by the end-of-the next quarter as well to you. As far as — as far as the other plants are concerned, we have had we have delayed a little bit on the project on fuel saving because frankly, we are running very full-on capacity utilization and we have had to delay that project because that would also entail some shutdown, which we are not in a position to take. So that could get delayed by a quarter or so on, which is the sand plant.
Pritesh Chheda
On the sand. So it is only left on the sand plant to bring the fuel chips or
Rahul R. Agrawal
Right? That’s right.
Pritesh Chheda
Okay. And what explains the Q-o-Q rise in the other expenses that —
Rahul R. Agrawal
I’m sorry,
Pritesh Chheda
There are — what explained the Q-o-Q rise in other expenses line-item between quarter two and quarter three? Is it the certain debottlenecking expenses are also a part of that?
Rahul R. Agrawal
Yes. There are repairs and maintenance cost debottlenecking expenses, which would be part, which would be part of that as well. Yeah, so I think that would be the major expense, which you have correctly pointed out, which would have caused some of those other expenses to increase.
Pritesh Chheda
So for the nine months since you have gone through two bottlenecking, both at polystyrene and ABL, we’ll have a larger repair and ventures expense this year versus the last year.
Rahul R. Agrawal
I think we are still almost the same, because last year there were other projects which had to be carried out and this year there are different projects. So there were debottlenecking projects which were carried out last year as well as you’re aware, we did a lot of process innovation as well and we did debottlenecking. So this is different debottlenecking has just happened at different times of the year.
Pritesh Chheda
Okay. Okay. My last question is on Thailand asset. So what should be the route to higher volumes or higher utilization and what should be the corresponding route to EBITDA improvement? And did you mention that the Thai assets should have a profitability similar to India or I misheard it?
Rahul R. Agrawal
Yes. So I have not made any comment with regards to comparative profitability. But in terms of asset utilization, you know, and revenue increase in Thailand, we do believe that there is a product profile there in terms of, you know, requirements across the world where we can service those requirements from that products produced in Thailand where we already have relationships even from India, for instance, which we can cater to. However, and at the same time, there are also relationships that we have in the other parts of the world, which the Thailand plant can contribute to. So we will have kind of synergistic benefits in our sales channels. On the product portfolio as well, there are a lot of interesting qualifications in the automotive sector, for instance, in Vietnam, in China, in Indonesia and great relationships from the plant in Thailand, which are supplying relatively unique and great products and we will be able to use that to our advantage in India as well. And consequently also there are similar things going on in terms of product portfolio qualifications in India. So both the things will work-in our advantage. We do believe there is — there are certain products for which we are already running short in India, so that additional capacities in Thailand can also be more effectively utilized in the short-term till we get our own capacities online in India. So there are multiple ways to increase capacity utilization and revenues in Thailand. We’ll just optimize for what is best across the Group.
Pritesh Chheda
Multiple ways means a lot of that volume has to be exported see some — so let’s say when you look at the world growth and the durables growth and the order growth, the growth — larger growth country is basically India. So the capacity utilization there will be a function of more volumes being sent to India or, is that the way — so when I said route to better volume, I need to know what — where incremental volumes will be sold basically.
Rahul R. Agrawal
So if you look at the current business profile of the Thailand business, 50% of the sales come from China in Hong-Kong, 25% comes from Thailand and the balance 25% comes from Japan, Korea, Indonesia, Vietnam. We actually have a very good understanding of each of these markets. There is actually a lot of opportunity in these markets still, which have not been tapped yet. So while India is of course also a market where we can export from Thailand, it is not the only market and it is not the market we are necessarily depending on as far as the Thailand product is concerned.
Pritesh Chheda
So we have to sell more volumes in the existing market.
Rahul R. Agrawal
Correct.
Pritesh Chheda
And profitability in the — as the profitability, what it should be less eventually on a full asset or what should be ROIC on your aspect?
Rahul R. Agrawal
ROC on my investment?
Pritesh Chheda
Yeah. Whichever way you are comfortable
Rahul R. Agrawal
So we haven’t given any kind of estimation on the ROCE and you’re talking about on the Thailand asset, right, essentially?
Pritesh Chheda
Yes, yes.
Rahul R. Agrawal
So on the Thailand asset, as you know, we have given $22 million for the acquisition of the asset. If you look at certain other details we have shared in the investor presentation, actually, they don’t have any bank borrowings in terms of working capital either. There is a working capital of about $13 million, I think about INR109 crores
Pritesh Chheda
— INR9 crores,
Rahul R. Agrawal
Which is there in the — which is used, which was actually being given by the parent company. There is an offset over there. And there is a cash-in the bank of about INR33 crores, about $4 million, which is also sitting in the asset. So you have to see in that context what we have actually paid-for the asset and what is the asset value. So we do believe that you know depending on how the profitability changes over a period of time with all the measures we intend to do in Thailand, we do believe the ROCE will be quite comfortably good on our investment at least.
Pritesh Chheda
But being a superior product, should the profitability then be higher than India per unit profitability?
Rahul R. Agrawal
Yeah. So I would not call any products superior or inferior. These are different markets with different applications. You know, they have different formulations. So all these things have to be fine-tuned to really understand where the profitability is higher and lower. But yes, there is a lot of room to do improvements and fine-tuning in all these cases
Pritesh Chheda
Okay, sir. I’ll come back if I have more questions, sir. Thank you very much.
Operator
Thank you. Next question comes from the line of Ranvir Singh with ESG Securities. Please go-ahead.
Unidentified Participant
Hi, Rahul, congratulations on the acquisition. I had a few questions pertaining to the Thailand acquisition first. So I see that our ABS capacity that we’ve acquired over there 1,000 KTs. And last year we did a sales of about 75 KTs, which was a revenue of INR1,100 crore. So at full capacity, our revenue potential should be somewhere around INR1,400 crores to INR1,500 crores. And last year, I see there was no EBITDA. So how do you see this going-forward?
Rahul R. Agrawal
So like we have already explained, the capacity can go up. The — whether the revenue will go to INR1,500 crores or INR1,700 crores or I can’t comment right now because obviously, it’s a function of price and price is often a function of raw-material costs, which can be volatile from time-to-time. So while I can’t comment on exactly what the revenue would be on full utilization levels, but keeping the assumptions of existing pricing in-place, that seems to be reasonable what you are assuming. I think in terms of EBITDA, there is a lot of improvements which are possible in the Thailand facility. The revenue increasing itself will make the business profitable. However, there are many other projects, which we do believe are possible to further fine-tune the asset. If you look at the India business also, there were lot of things which were being done in a certain management method prior to our management takeover. And prior to the COVID eras when the company made large profits, if you see the balance sheet of your Starolution or Stynix at that time for the period of ’19 and ’20, you will see a certain picture with — at certain capacities. With the same capacity of slightly high capacities. Obviously, we have certain EBITDAs which are much more healthy. So I do believe there is a case to do a lot of work-in Thailand along similar lines. We have to wait-and-watch what that yields in terms of exact EBITDAs.
Unidentified Participant
Yeah. That answers my question. So when you acquired the company in November ’22, we saw that there was a margin improvement due to your experience or processes. So I get that. Yeah. So I just wanted to understand like the — I was just seeing the balance sheet of the Thailand acquisition of the Thailand unit. So you were saying they have more long-term debts and the total equity is like INR464 crores. So like how did we like get the — like plan for INR160 crores net of cash balances like because I remember we had announced our capacities being expanded from 2 lakh 10,000 to ABS from 2,10,000, like from 1,5000 to 2,10,000 and polyestine from 1,5000 to 150,000, which was like a 150K tonne increase for which an estimated cost was INR650 crores. I know that was not conclusive. So like — and like is this like a really good deal?
Rahul R. Agrawal
I think you’ve answered your question now, Ranvi.
Unidentified Participant
Yeah, yeah. Yeah. Like I wanted affirmation.
Rahul R. Agrawal
I don’t see a question there, so I’m not answering it, but I think you’ve answered it yourself.
Unidentified Participant
Okay. So another question,, like we had planned 2,10,000 to 360,000 capacity expansion. So is this capacity added included in that or that would be separate?
Rahul R. Agrawal
So we have already mentioned in the investor presentations that whatever additional capacities we are augmenting or we had planned in India, we are in fact accelerating it. So this has got — essentially it is mutually exclusive from the Thalin acquisition. The Thailand acquisition will add capacities, which are different from what we are planning in India. So in India, we were added — we are planning to add 100,000 tonnes of additional ABS, which was originally planned to come online by 2028. However, we have in fact accelerated that where we believe part of that capacity or 50% of that capacity augmentation would happen in ’26 itself, which is next year. And the balance 50,000 also would be ahead of schedule as the CFO has already pointed out. In the case of, again, we are conducting additional engineering studies. We do believe so we went from 65,000 to 100,000. We do believe getting up to 150,000 or higher numbers also would be achieved considerably fast. So we are accelerating all our plans as you — as you can see, and this is a mutually exclusive from the Thalinix acquisition.
Unidentified Participant
Thank you,, that answers my question. And I just want to understand like and rubber, like where do they fit-in the value chain and like do they have a separate market of their own or they are used to produce ABSL? So ABS and SAN have got nothing to do with polystyrene.
Rahul R. Agrawal
They are different products, you know, so they are different the polymers., of course is used as an intermediate to make ABS. SAN also has its own merchant market, which can be — sand can be sold. We do sell sand in India as well. We sell certain volumes in the merchant market here. And in Thailand, of course, also san is sold globally. In the case of rubber, for ABS, rubber can also be sold. It can also be bought. There are certain grades. But generally, we are always running short in terms of our other capacity to make our own ABS, so we don’t sell it in the market.
Unidentified Participant
Okay. All the best. Thank you so much.
Rahul R. Agrawal
Yeah.
Operator
Thank you. A reminder to all the participants, please restrict yourself to three questions. Next question comes from the line of Ashish from InvesQ PMS. Please go-ahead.
Aashish Upganlawar
Yeah, thank you so much. So this Thailand acquisition has been pretty well-rounded up on the call. Just a couple of things, sir. I would have missed the current capacity utilization that we are running there. And secondly, see the kind of turnaround that you have alluded to on the Thailand facilities. So what is the outer timeline for this to reach a reasonable level of, say, profitability because you would have done those low-hanging kind of things that you would do there and bring it there. So these couple of things would help us actually.
Rahul R. Agrawal
Yeah. So right now, we are running at about 60% capacity utilization, 55% to 60% capacity utilization in Thailand. We will require some more time to really detail and-answer those questions. We do have a sense of when it can happen and we are running you know with a lot of projects currently in Thailand we’ve just initiated. It’s been only — it’s been under two weeks that we have actually taken over management control. And as you can imagine, we are competitors with. So there is a lot of information still which is coming for us. You know, in terms of asset, it’s a great asset. There are no surprises. But in terms of the market opportunities out there because these are different markets for us, we do believe there are multiple opportunities where we can easily tackle, you know to gain additional market-share and increase revenues and increase volume capacity utilization. But this will take a little bit of time. So you know right now exactly how much time that will take is something that we will be able to better address in the next set of questions in the next call.
Aashish Upganlawar
So is it fair to assume that maybe in the next four quarters, maybe a year-around 12 months, we’ll be able to see quite a bit of this to kind of play-out in terms of whatever —
Rahul R. Agrawal
I believe. I believe so.
Aashish Upganlawar
Yeah, sir. Okay. Okay. And lastly, I mean, we’ve seen the acquisitive nature of you as a promoter and that’s the way probably things have worked for you. So is this going to be the modus openly typically where you have done the Indian acquisition, now the Thailand acquisition? Is it fair to assume that we might have few more as these current acquisitions mature, are there opportunities firstly? And would that be the strategy typically for you?
Rahul R. Agrawal
Okay. So I would not necessarily use the term acquisitive to be indicative of nature of promoters per se. I think we are looking at all and every opportunity which can help the company to become stronger, more robust and grow essentially in a sustainable manner, in a safe manner. And I think we adhere to that strategy going-forward. If there are opportunities, we are — we will definitely look at it. But we do believe currently with this acquisition in Thailand and of course, all our planned expansions in India, there is a significant growth plan, which has already been outlined between these two entities.
Aashish Upganlawar
So is it safe to assume that for the next 18 months, probably we may not take anything more on the plate given the work at hand right now with organic and this is inorganic thing now.
Rahul R. Agrawal
So in the previous question, I think someone did mention how attractive this particular acquisition was. So if there are very attractive opportunities that come your company’s way, I’m sure you will not want me to ignore them.
Aashish Upganlawar
Sure. Yeah, yeah. Actually. Thank you so much, sir. Yeah, all the best.
Operator
Thank you. Next question comes from the line of Ajay Sharma with Maybank. Please go-ahead.
Ajay Sharma
Yeah. I just wanted to ask you basically in terms of the global spreads. I see the global spreads actually for both ABS and actually have improved quite a lot in the last quarter and despite that, I didn’t see that impact coming through for the company, I guess, and you explained because of higher. But I guess, should we see that benefit come through in Q4 because I mean if the global spreads are improving, I guess that improves your pricing power in India, right?
Rahul R. Agrawal
So,, overall, if you look at the global spreads for ABS or polystyrene, we don’t see, in fact, any improvement. I have the data in front of me. We can share this information offline with you. But overall, the spreads have in fact deteriorated in the last two quarters. They were very low in of course in FY ’24 they slightly improved in FY ’25 in the first-quarter, but they have in fact deteriorated in the last two quarters. You know, if you look at still the spreads in India versus the global spreads, Indian spreads are much better or at least our spreads are much better. I can’t come kind of comment on the entire market, but our spreads are definitely much higher than the global spreads. So I think that is a position we do intend to defend and going-forward, we will work and we’ll make sure that we are able to do that. And this is true, by the way, both for ABS and for polystyrene, this declining spreads in the last two quarters.
Ajay Sharma
Okay. And so I’m surprised actually where the data have seemed to suggest otherwise.
Rahul R. Agrawal
No problem.
Ajay Sharma
Yeah, yeah. I’ll check that with you offline. But I mean, the spreads actually are already below the midpoint, I guess in terms if you look at the long-term averages. So I mean I mean, do you see room for global spreads to actually bottom out and improve? Or I mean, what’s going on because or is it a China factor which is driving them down.
Rahul R. Agrawal
Yeah. So I mean, if you look at the spreads, you know, say from kind of September ’22 or October ’22 until now we have had been control and we’ve been managing this business for the last eight, 10, eight quarters now, I guess. In the eight quarters that you have seen, there has been a fair amount of volatility in the spreads, right, even though they are not high, they are low, but even at the low-end, there has been some volatility. You don’t see the same volatility in our spreads, right, because of the nature of business that we do in India. So I think globally, of course, there could be volatility going on in the future as well. We will have some knock-on impact, but I think we do have certain positions which are defendable in India and we do believe that can be the case. So by — like I have mentioned in the past, by capacity augmentation, by rationalizing costs and by improving product profiles, you know, we can we can remain ever more robust to ensure that our spreads are protected.
Ajay Sharma
All right. And I mean so Thailand profitability to that extent will depend much more on the global spreads, right? I mean it’s unlike India.
Rahul R. Agrawal
So one thing — one has to be cognizant of when we look at ABS spreads, global spreads, they typically talk about general-purpose injection molding grade ABS, okay. In Thailand, the share of that business is extremely low even now. We do business typically in high heat. We do in refrigeration grade liner ADS and we do in certain other specialized sectors like electrical. So there is not a direct correlation per se. There is of course, again, like I said, a knock-on effect for those spreads as well, but those spreads are generally better than what you would have in the general-purpose injection molding grades of ABS, which would be the case, what you would normally see in your spreads which are generally published
Ajay Sharma
Would you say your spreads are comparable to Bansali because I see their spreads are quite high actually, more like 25,000, but whereas your blended is more like 16,000. So I’m just wondering, is it the bringing it down or your AB spreads are comparable or even your AB spreads are lower than.
Rahul R. Agrawal
So I won’t comment on the competitors. All I can say is our spreads are quite healthy and probably the best-in the industry in India. And in terms of polystyrene, yes, there is certain improvements we have had as a result of validations and additional OEM business, which we have got. And now of course with capacity augmentation, but there is still some room to improve in both always.
Ajay Sharma
Okay. Last bit. So you’re saying there shortage in certain products. So I mean, logically shouldn’t that mean better pricing power for you and a better trend for spreads going-forward?
Rahul R. Agrawal
So capacities are being augmented by us and our competitors and also there are imports coming into the country. So there is healthy competition, while there is shortage of locally produced product, at least in the case of ABS, not so much in polystyrene. But in the case of ABS, there is kind of imports happening into the country but we are also narrowing that gap with additional capacities coming online
Ajay Sharma
And the rupee depreciation doesn’t it help?
Rahul R. Agrawal
Not really. I would not say so.
Ajay Sharma
Okay. Thank you so much.
Rahul R. Agrawal
Yeah. Thank you.
Operator
Thank you. Next question comes from the line of Anand Mundra with. Please go-ahead
Anand Mundra
And hello, sir. Sir, congratulations on good acquisition. Wanted to understand, sir, how much more funds we have to invest in Thai business to turn-around it?
Rahul R. Agrawal
So currently,, no major capex is envisaged. I think all of this will be planned after some time. And as and when there is anything significant, which would be thought for Thailand, we would definitely kind of come out with some kind of information surrounding it for all our investors.
Anand Mundra
Okay. So nothing for capex and nothing for working capital. So no more incremental investment required currently.
Rahul R. Agrawal
I think if the business grows, which we expect it to, there might be certain additional working capital required, but we’ll see how to tackle that. And in terms of capex, currently there is no major capex which is planned.
Anand Mundra
Okay. And sir, what is the gross margin of Thai business? So again, we have some information on that — on that from Thailand.
Rahul R. Agrawal
But again, it’s competitor information, we are not actually allowed to disclose it because this is information which was within yours. We are still competing with them globally. As soon as we complete our first-quarter of working in India, we’ll be able to give that information to the public.
Operator
Thank you. Thank you. MR. Mundhra, please rejoin the queue for more questions. Next question comes from the line of Meet Parik with Mihir Asia; Company. Please go-ahead.
Unidentified Participant
Hi, sir. Thank you for the opportunity. I wanted to ask about the five — the 50 KTs that you are adding by FY ’26 and beyond that, the next 50,. So what would be the capex envisage for that? And also the polystyrene that we want to expand from 65 to maybe 100, 105. So what would be the timeline for that? Will that be after the ABS? And what would the capex for that be? Yeah. Thank you.
Rahul R. Agrawal
Yeah. So you know, Amit, as we had mentioned in the previous calls, our estimations were to the tune of about INR650 crores investment for both the ABS san and polystyrene businesses for their expansion. We still believe and hold-on to that number, you know, with some margin of error. However, we do believe in terms of ABS and SAN, the investment outlay could be to the tune of about INR500 crores. And for polystyrene to the tune of about INR150 crores. Out-of-the INR500 crores, you know, obviously, it will be in phases. The first phase, like I said, we are planning 50,000 tons of ABS and the next phase 50,000 tonnes. Some of that 500, which is for overall 100,000 tons of ABS may be front-ended to enable quicker execution for the entire phase, Phase-1 and Phase-2 of ABS. For polystyrene, we have envisaged about 150 CR. But again, engineering studies are going on for additional polystyrene. We have done debottlenecking where we’ve augmented capacities from 65 to 100, but to go from 100 to say 150 or 170, we will require results or those studies to come back and that is likely in the next couple of quarters.
Operator
Thank you. MR. Parik, please rejoin the queue for more questions. Next question comes from the line of Siddharth Purohit with InvesQ Investment Advisors Private Limited. Please go-ahead.
Siddharth Purohit
Yeah, hi, sir. A lot of my questions have been answered and you also answered partly on the Thailand operation. Just one clarification if you could give. I understand the Thailand market is different and the pricing are different, but players who are already operating in that geography, what kind of space they might be operating at compared to India maybe in absolute times, if you can say?
Rahul R. Agrawal
So again, so that it depends on what kind of business you’re doing. There is publication data is typically on the general-purpose of injection molding grade ABS spread which are publicly available. And the incumbents currently in the Thailand market are also selling both kinds of products and the Thailand market, as you rightly said, is a little bit different from India. We do believe from our perspective, we have an opportunity to grow further in the Thailand market. We only have only about a 10% to 12% share of the Thailand market as of now out of our total current sales of, say, 25% of our sales, but the market is also larger. There is a good opportunity there to grow. Even within the sectors that we say cater to in India, say, in the automotive or household, there are opportunities in Thailand, which are currently not being tapped. We do believe that the spreads in Thailand for these specific markets to be the same, if not a little bit better in Thailand. So we can take that and extrapolate that into some kind of a spread calculation that you would like to do for the Thailand business.
Operator
Thank you. MR. Purohit, please rejoin the queue for more questions. Next question comes from the line of Chirag Shah with Dalal. Please go-ahead.
Chirag Shah
Yeah, hi. Thank you for taking my question. Am I audible?
Rahul R. Agrawal
Yes.
Chirag Shah
Yeah. Yeah. Sir, I missed your last comment on the spreads on Thailand, which you said to the earlier participant.
Rahul R. Agrawal
No, so basically what I said is, you know, when you look at spreads for any country, the spreads vary depending on what kind of market segment you’re catering to. So you know if you are to look at spreads in Thailand, say vis-a-vis spreads in India for the specific market that we are catering to, say, whether it’s automotive or specifically — say, the liner grid ABS market, which the Thailand business caters to, they are very different from the spreads that you would have in a general-purpose injection molding ABS business. I do believe that the spreads in the Thalin business can be at par, if not slightly better than the Indian business for those specific rates. But again, this is a new business in terms of those specific rates for us and over a period of time, we’ll further refine what those spreads can be.
Chirag Shah
Okay. So generally, for the company as a whole, obviously, I’m including both Polish Indian and ABS, we are at around $200 of EBITDA per ton, correct? So the — and you actually commented also saying that we are better than the world average. So what would be the world average — global average for EBITDA per ton roughly would be — how much discount it would be?
Rahul R. Agrawal
Yeah. So I don’t know anybody who makes ABS and polystyrene in the same ratio that we do. So of course, our EBITDA per ton is a reflection of you know kind of what business we do at a blended level. So it will not be fair to compare how we do it vis-a-vis anybody else in the world does it. There are spreads available on ABS. There are spreads available on polystyrene, you know, globally. And typically these spreads are definitely much lower than what we have in India. Thank you.
Operator
MR. Shah, please rejoin the queue for more questions. Next question comes from the line of Adity Kedan with Smith Institutional Equities. Please go-ahead.
Aditya Khetan
Yeah. Thank you, sir, for the follow-up. Sir, onto the business, sir, like we have expanded to around 1.05 and we are planning to go to 1.5. Sir, just I wanted to know, is there any economic sense like in expanding in polystylene wherein like the industry is growing in only mid-single digits. Apart from it, sir, there is also a lingering issue globally on the single-use plastic band, which can incrementally put a cap on the incremental demand for global polystyrene. So you think, sir, like expanding into the polystyrene makes sense? And is there any like, so we are planning to use more polystyrene to make the polystyrene compounds or the sheating business, which are made from polystyrene. Is that the plan ahead or what is like we are planning?
Rahul R. Agrawal
Yes, it’s a good question, Aditya. So you know, historically the polystyrene business was operating at very low volumes. You know, prior to our management takeover, the average of that plant would be less than 45,000 tonnes per year. We do believe to achieve economies in that plant and to make and keep that business profitable and more efficiently run, it was vital to enhance the capacities and also the utilization level. So first, we increase the utilization level to 65,000 tons, which we believe is the maximum that was possible in the — in the plant prior to our debottlenecking. Post debottlenecking, we spent about INR16 crores to debottleneck general-purpose polystyrene where we are adding potentially close to 35,000 tonnes of volume, 35,000 tonnes of volume arguably adds about INR350 crores at a capital investment of INR16 crores, would yield a very good ROC in-spite of the lower margins that you see in polystyrene. This we are able to do because, of course it’s a running plant where we are doing debottlenecking. For the next phase of expansion for, again, we are looking at HIPS, which is still growing well due to demand in refrigerators, demand in air-conditioners specifically also. We do believe there is a — there is a case — business case for growth. India will still be needing more HIPS. And our expansion will also be at a cost which will be akin to a brownfield expansion. And we do believe that the return on capital employed on that project would also be attractive and further improve our operating efficiencies on the existing site for polystyrene as a whole.
Operator
Thank you. MR. Getan, please rejoin the queue for more questions. Next question comes from the line of Rohit Ohri with Progressive Shares PMS. Please go-ahead.
Rohit Ohri
Hi. So for this strategically, geographically located property of 17 acres, which is closer to the highway as well as the railways as well as the ocean, if you say the Gulf of Thailand, how much of free land is available and what sort of scope is there for brownfield expansion, if any over there?
Rahul R. Agrawal
So it is hard to specify exactly what kind of a capacity augmentation can take place. There is some freeland available, that is for sure on that site. However, how that land has to be utilized and what kind of additional capacities can be augmented over there is something that we are still working out. It’s still early days. Right now, the capacity of the existing plant itself is underutilized. We do believe that first, we would like to address that and there are certain other efficiencies, which we do believe are possible at the plant-level. So there are multiple projects that we are undertaking in order to get all of that in-place. Once that is in-place, we will definitely review and see what kind of further capacity augmentation is possible at that site with the freeland available.
Operator
Thank you. Thank you. MR. Ohri, please rejoun queue for more questions. Next question comes from the line of Krunal Shah with Enam Investments. Please go-ahead.
Krunal Shah
Hi, thank you for the opportunity. My question is regarding the Thailand acquisition. So if you could elaborate a little bit about the competition in the area, who would be the key competitors for the products that we are selling? And secondly, on the mix, how is the mix between sand and ABS in the Thai business?
Rahul R. Agrawal
Sure,. So in Thailand the market is around 150,000 to 200,000 tonnes of ABS. We actually have a very small share of that market, only about 10% to 12% market-share. Around 40% to 45% of that market is with IRPC, which is the other ABS producer in Thailand and the balance is still imported into that country. In terms of, you know kind of split between our own ABS and SAN currently and from Thailand, it’s essentially half-and-half. So 50% of product is sal and 50% of product produced is ABS. So there is a much higher percentage of sand sold from the plant in Thailand, say, compared to India, for instance.
Krunal Shah
Got it. Great. Thank you, Rahul. Thank you so much.
Rahul R. Agrawal
Yeah, sure.
Operator
Thank you. Thank you. Ladies and gentlemen, as there are no further questions, we have reached the end of question-and-answer session. I would now like to hand the conference over to Mr Chintand Doshi for closing comments.
Chintan Doshi
Thank you, investors and investor communities for joining our meeting and showing interest in our company. We look-forward to answer you in the next meeting. Announce suitable time in the future. Thank you.
Operator
Thank you. On behalf of Performance Materials Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines