Supreme Petrochem Ltd (NSE: SPLPETRO) Q3 2026 Earnings Call dated Jan. 23, 2026
Corporate Participants:
Rakesh Nayyar — Executive Director and Chief Financial Officer
Analysts:
Purvangi Jain — Analyst
Nirav Jimudia — Analyst
Sailesh Raja — Analyst
Aditya Khetan — Analyst
Rahul Agarwal — Analyst
Kirtan Mehta — Analyst
Radha Agarwalla — Analyst
P. Venkatesh — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Supreme Petrochem Limited Q3 and Nine Months FY ’26 Earnings Conference Call. [Operator Instructions] And there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions]
I now hand the conference over to Ms. Purvangi Jain from Valorem Advisors. Thank you. And over to you, ma’am.
Purvangi Jain — Analyst
Good evening, everyone, and a very warm welcome to you all. My name is Purvangi Jain from Valorem Advisors. We represent the Investor Relations of Supreme Petrochem Limited. On behalf of the company, I would like to thank you all for participating in the company’s earnings call for the third quarter and nine months of the financial year 2026.
Before we begin, let me mention a quick cautionary statement. Some of the statements made in today’s earnings call may be forward looking in nature. Such forward looking statements are subject to risks and uncertainties which could cause actual results to differ from those anticipated. Such statements are based on management belief as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of today’s earnings conference call is purely to educate and bring awareness about the company’s fundamental business and financial performance for the quarter under review.
Now let me introduce you to the management participating with us in today’s earnings call. We have with us Mr. Rakesh Nayyar, Executive Director and CFO; Mr. Dilip Deole, Chief Executive Officer, Finance and Accounts; and Mr. D. N. Mishra, Company Secretary.
Without any delay, I request Mr. Rakesh Nayyar to start with his opening remarks. Thank you. And over to you, sir.
Rakesh Nayyar — Executive Director and Chief Financial Officer
Thank you, good evening, everybody. A pleasure to welcome you to the earnings conference call for the third quarter and 9 months of the financial year 2026. I’ll give a brief overview of the financial performance for the quarter ended 31st December ’25. On a standalone basis, the operating income for the third quarter was INR1,265 crores. It was lower by 10% year on year, mainly on account of fall in SM prices. Average published price of SM during third quarter of FY ’25 was about $1,040, while the same dropped to about $810 MT in October — December 2025, which resulted in the fall in the revenues as well. The operating EBITDA stood at INR69 crores at a margin of around 5.47%. The total EBITDA including other income stood at INR78 crores with a total EBITDA margin of 6.12%. The net profit after exceptional items and tax was INR30 crores.
For the nine months of the financial year 2026, the operating income was INR3,751 crores. The operating EBITDA stood at INR262 crores with an operating EBITDA margin of 6.97%. The total EBITDA was INR294 crore with total EBITDA margins of 7.77%. The net profit after tax and the exceptional items stood at INR159 crores. On the operational front, the sales volume of the manufactured products stood at 91,265 MT in quarter three as against 85,537 MT in quarter three FY ’25. And for the nine-month period, volume stood at 2,62,537 as compared to 2,60,416 in the corresponding period of the previous year.
On the raw material front, after witnessing a prolonged decline until November 2025, styrene monomer prices kind of stabilized and with an upward — and showed an upward bias. The trend has encouraged processors to increase their offtake of styrenics products in December. With regards to our capex project, the ABS plant with an installed capacity of 70,000 MTPA was successfully commissioned and production started in September 2025 — sorry. The ABS plant operated satisfactorily. However, operations were suspended in December 2025 due to malfunctioning of a critical production equipment. Necessary action is being taken in consultation with the engineering consultant, equipment supplier, and technical collaborator to restore the operations.
On the balance sheet side, the company continues to remain debt free and all capital expenditure is being funded entirely through internal accruals. As of 31st December 2025, we maintain an investable surplus of INR463 crores.
With this, I conclude my opening remarks. We now open the floor for question-and-answer sessions. Thank you.
Questions and Answers:
Operator
Thank you very much, sir. We will now begin the question-and-answer session. [Operator Instructions] The first question comes from the line of Nirav Jimudia with Anvil Wealth. Please go ahead.
Nirav Jimudia
Yes, sir. Good afternoon and thanks for the opportunity. Sir, few questions. Sir, first is on the ABS plant. Like we commissioned the plant in September and the equipment failure and the subsequent things happened in the month of December. So, in our overall sales volume, what we have reported in Q3, is it possible to share the contribution of ABS into those numbers, A? And B, when can we again restart the plant and take the capacities to the optimum levels in terms of the production?
Rakesh Nayyar
The collaborators, the engineering consultant, and equipment suppliers, they have already reached our site last week, and they are evaluating all options. So, I really can’t tell you at what — when and where it will start operations. And — but only thing I can tell you at this stage is that the plant ran very smoothly and the commissioning and operations are very smooth when it was operating in the month of October and November. But then this unfortunate incident happened and we had to shut down in December. And it’s a proprietary critical equipment. We could not have opened it here also. Their arrival was delayed because of the Christmas holidays and the New Year holidays in Europe and the visa issues and all that. But now finally they are here and the work is on. But we have no definite answer from the team yet that by when it can be operated.
Nirav Jimudia
Correct. And sir, any number in terms of the contribution?
Rakesh Nayyar
These are all styrenics for us. So as far as segment-wise numbers are concerned, we never share, and I won’t be able to share that number.
Nirav Jimudia
Correct, correct. Sir, you mentioned that the plant ran very smoothly, so — and we subsequently also commissioned our compounding line of ABS in quarter three or so. So — yeah, so have we got an opportunity to convert those ABS into the compounds in Q3, and the volumes have been a part of —
Rakesh Nayyar
We have converted. We have converted the ABS — our ABS into compounds and have also successfully marketed them also. Since our material of ABS is very white, unlike the other one, original emulsion grade material available in the market, which is more of an ivory or a yellowish tinge. So, the — there were issues with regard to the originally the master batches, the quantity of master batch, the color matching. Those issues came because our material is absolutely white, which needs less of pigments and others. So that matching process took some time, but now wherever that matching has happened, the compound — and not only of color compounds, but as far as the other additive compounds are also going — doing well there.
Nirav Jimudia
Correct. Sir, second question is on the demand for EPS. So how we have seen the demand for EPS here in India for Q3 and nine months of FY ’26? Also, if you can share the market size of EPS in India and your thoughts on the subsequent quarters, how the demand of EPS is panning out.
Rakesh Nayyar
See, in India, EPS is doing all right. The — in the first six months, the — like any other polymer, because the OEMs lifting was less, the demand was also slow there. But then the — in the current quarter, the market picked up. And our estimation is that the — in the current quarter, the market picked up by almost — as compared to the previous year, by almost 6% or so. The market grew. As far as the demand is concerned, the overall market size of EPS in the country is around 160,000 tons.
Nirav Jimudia
Correct, correct. Sir, third question, and probably the last one, sir, how do you see — or let’s say if I rephrase it that way that, sir, from the polystyrene part, are we working on any newer applications which could be potentially be termed as the value-added grades in the — either on the GP side or HI side? Your thoughts here. And since we have been predominantly a polystyrene player and now, we have added the ABS capacities, and since the Panipat plant is far away, are we planning any debottlenecking for the existing PS capacities? Thank you so much.
Rakesh Nayyar
I would say that whatever is being discussed in-house, but that is still not officially — we cannot share that thoughts with you, so I would give a pass to your question, Nirav.
Nirav Jimudia
Correct. And sir, any grades on which we are working so far as the polystyrene is concerned?
Rakesh Nayyar
Yeah, there are grades on HIPS and GP also, their grades are being developed, but then unless and otherwise they’re fully developed and marketed successfully, very futile to comment on that. So, I — that’s why I said that unless it’s open out, I can’t really comment on it.
Nirav Jimudia
Perfect, perfect, perfect, sir. Thank you so much, sir, and I’ll join back in the queue.
Operator
Thank you. The next question comes from the line of Sailesh Raja with B&K Securities. Please go ahead.
Sailesh Raja
Thanks for the opportunity. Sir, it looks like you are unwell today. I hope you feel better soon. So, I have 3 questions to ask. First is, so excluding the ABS capacity, we have achieved 80% utilization level in 3Q. And with the IOCL styrene monomer plant facing commissioning delays, so how is management thinking about sustaining growth in the near to medium term? Are there any plans for capacity expansion or debottlenecking to support volume growth in the interim phase?
Rakesh Nayyar
Sailesh, I just answered this to Nirav also, that we are discussing internally certain plans but it is too premature for me to say anything at this forum. And you’re right that our polystyrene plant operated at 80% in this quarter. Our EPS plant also operated at almost 87%, 88%. So, the demand picked up in the last quarter, particularly towards the end of the quarter after the styrene prices kind of stabilized Which were — had a free fall for the last almost one year. So, we are fully appreciative of the fact that the going forward with this IOCL styrene plant getting delayed, our Panipat plant will also get delayed. And to keep the domestic demand, we need to be working on these — some steps we have to take. So, we are working on that.
Sailesh Raja
Okay. Sir, what is the…
Rakesh Nayyar
We have still a cushion of almost 20%, 15% there, and we are also in the export market, so to some extent we have cushion there also. So, in the near future, we don’t see that there is — that we will have any constraints as well as supply to the domestic market is concerned or meeting the domestic demand is concerned.
Sailesh Raja
Okay, okay. So, what is our total exports volume in nine months?
Rakesh Nayyar
The total export volumes, we don’t give the numbers separately, Sailesh. We have been always giving one number only. And — but then the exports this year are better than the last year.
Sailesh Raja
Okay, okay, okay. Sir, now that size of the company, it is $1 billion market cap company, and inventory level always we maintain at very lean at 30, 40 days. But if you see the quarterly performance, there is a lot of volatility. So unlike, styrene product, the compound business across peers appears relatively stable. So, what step that we are taking to reduce the earnings volatility and improve the predictability?
Rakesh Nayyar
The raw material volatility is there, but then we have been also mitigating that volatility by keeping very lean stocks, or the way we have negotiated our contracts with our suppliers, so that we are affected, not that we are fully insulated, but then the — to some extent, the impact is reduced. It is cushion for us. And as it is going forward with the ABS product coming in, ABS compounds coming in, so they are the other product which gets added to our portfolio. And compounds business, you rightly said, provides a cushion there towards the volatility is concerned. So, our focus will be more on the ABS compounds with our own ABS available and the and the compounding facility, to the extent we have, we should be focusing on that.
Sailesh Raja
Okay, okay. Sir, again, same question about the ABS side. So how serious is the malfunction in the new manufacturing equipment? Does it entail any incremental capex or execution risk beyond what was originally estimated? And also, are these issues covered? Yeah.
Rakesh Nayyar
The capital cost is not an issue here. The capital — because even if there is any — that one, if these equipment are under warranty…
Sailesh Raja
That’s what I wanted to ask. Sir, is there any insurance or performance warranty?
Rakesh Nayyar
These are insured. The — since the — these are the proprietary equipment and we don’t have the drawings for it, we cannot touch these equipment because otherwise the warranty will go away for us.
Sailesh Raja
Okay.
Rakesh Nayyar
Right. So, yes, the impact is certainly — it’s a big setback for us in terms of the loss of production and the opportunity to penetrate the market for — in this interim period.
Sailesh Raja
Okay, okay, okay.
Rakesh Nayyar
But all efforts are being made so that we are able to commission the plant at the shortest period.
Sailesh Raja
Okay, okay, that is great, sir. Sir, one last question, sir, has there been any transition in demand from suspension grade ABS to mass ABS grade in the market where Versalis has set up plants before Supreme, like in China or Middle East? Do you see that…
Rakesh Nayyar
With the mass ABS only being 10% of the global capacity today and 90% is still suspension. So automatically — and the demand is there for all ABS, so it all gets absorbed. So, it’s very difficult to say that some specific application shifted to mass unless otherwise a global application-wise study has been done, but which we don’t have any data about, please.
Sailesh Raja
Okay, okay. Okay, sir. Thank you, sir. All the best.
Operator
Thank you. The next question comes from the line of Aditya Khetan with SMIFS Institutional Equities. Please go ahead.
Aditya Khetan
Yeah, thank you, sir, for the opportunity. Just a couple of questions. Sir, first one, polystyrene, when we said earlier, like, we used to mention like the average gross spreads were around $150, 200 per ton. So today, sir, where are they standing and what are the reasons like for the compression if we are witnessing?
So, second question is onto the mass ABS. Sir, when we — so we know like the technology is quite new in India and there are no players who have adopted this technology. Although, sir, not asking for timeline, but in the near term, how quickly can you start the plant considering all the issues can be resolved?
And similarly, sir, when we have — I think, sir — so with this kind of a product, ABS, the order book already would have been full, like, so before commissioning the plant only. So, what are we saying to our customers now? Like, are we delaying the — you can say the sampling of — are we delaying the products sending to them?
Rakesh Nayyar
Aditya, see, as far as our ABS is concerned, we did not take any advance order book as we wanted to use — let everybody use there for the applications. And the — as I explained in earlier speaker’s case, because it’s more whitish like any other polymer as compared to other suspension grade materials, emulsion-grade material. So, the master batch comparison and matching is an issue. And the — this is like any other polymer. There is no such advance order book for these products. That’s one.
And as far as the startup date is concerned, I really can’t comment on today, but we — since the whole team of engineering consultants as well as the equipment supplier have already arrived, they are at our plant. They are open the equipment, looking at it. Unless we get a green signal, some kind of an idea or a commitment from there, I really can’t comment on it because whether they are going to just replace some part or they have to repair that part, all that is not known to us at this stage. And it’s a massive equipment which they have opened up. And they’re working on it. So, it’s very difficult for me to say.
As far as the margins are concerned, yes, the — globally also the styrene prices when they were falling, everyone want de-stocks, they do not want to keep any material, that is one. That pulls down the demand. And also, the demand in Europe and other countries was low — on the lower side. And the styrene prices, which last year were closer to $1,050 or so, in this quarter they averaged at almost $810. And that was almost a fall of over 20% prices. So that shrinks the market because the — in the falling market, the demand automatically shrinks. So, these are the reasons for the PS margins to shrink also, and demand also has come down.
Aditya Khetan
Got it, got it.
Rakesh Nayyar
First six months of the year, because of the early monsoons and the very pleasant weather continuing for long period, the cooling devices demand was down. The ACs, refrigerators, coolers, their demand was also down. So, the OEM pickup in the first six months of the year was low. Now the — from December onwards, the OEM season starts, and we have seen in the last two weeks of December that the pull from the OEMs is better now.
Aditya Khetan
Okay, thank you, sir, for that explanation. Sir, with the uncertainty around ABS, what sort of volume growth are we targeting for FY ’27 and ’28?
Rakesh Nayyar
FY ’27, ’28, I’ll be — the — if I — unless I know the — our likely date of commissioning of ABS, to comment on that is very difficult. And assuming that the — it’s operational by the end of this current financial year, then we should be logging in almost closer to 10% or so should be our growth.
Aditya Khetan
Okay. And sir, the contribution from the base business would be how much from this 10%?
Rakesh Nayyar
The contribution from base business would be closer to 3% to 4%.
Aditya Khetan
Okay, okay. So, 7% would be from ABS if it started commission from this quarter. Okay, got it.
Rakesh Nayyar
Yeah.
Aditya Khetan
Sir, just one last question. Sir, when we look at the import history of PS, polystyrene in India, sir, in this calendar year, CY ’25, just gone by, so there has been the highest import which has happened over the last 10-, 15-year data when we look. Obviously, the imported from China, wherein large capacities are…
Rakesh Nayyar
Now you’re talking about FY ’25?
Aditya Khetan
Sir, CY ’25, calendar year ’25, from January to December.
Rakesh Nayyar
Okay.
Aditya Khetan
So, sir, the import has been quite high of polystyrene, and a lot of imports are coming from China. Any, sir, idea like which are the large capacities, sir, which are expanding in China today?
Rakesh Nayyar
Imports from China are not high. The imports from Thailand are high this year, and also that the — there is — though they all get cleared under this HS code, one needs to go and segregate this data because there is a lot of the — though it is called reprocessed or regranuled or polystyrene that gets imported, which is used in applications where the prime grade polystyrene is not used. Like your wall panels, etc., or photo frames. So, the imports are happening there. And now in India, the wall panel business has picked up a lot. The — that material is getting more and more diverted to that place. But there has been an increase. You are very right; there has been an increase in the calendar 2025. Particularly, this is in the month of March, April, and May. These are the three months when all of a sudden bulk of it came.
Aditya Khetan
Correct, sir. Any supply chains, sir, which has happened, like you see, like lot of material which are coming, low-cost imports, any particular reasons, sir, like, global capacities which have been added, which have started, which is going…
Rakesh Nayyar
A major part of this coming in as a recycled material or the grade — B grade material which is getting used for the — where the typically recycled material is used because there you don’t need the impact, you don’t need the finish, you don’t need any color issues and there are — mainly there are photo frames and wall panels.
Aditya Khetan
Okay, okay. So, these are having no competition with the refrigerators, ABS, or the —
Rakesh Nayyar
The material which comes from Thailand, South Korea, Taiwan, they are the major source, or Singapore. They are the ones from there what material comes that has a competition and which has been there historically always. Now the whole material coming in from USA today that is all fully recycled material or the material which comes from even — you will see if you look at the country-wise data there, you will see even material coming in from Ghana and Slovenia and Salvador and all that. Those volumes are essentially recycled material because they do not have capacities there to produce polystyrene.
Aditya Khetan
Okay, okay. Okay, sir, got it. Thank you, sir. That’s it from my side.
Operator
Thank you. [Operator Instructions] The next question comes from the line of Rahul Agarwal with Ikigai Asset. Please go ahead.
Rahul Agarwal
Hi sir, very good evening. Sir, few questions and just to extend a bit on the earlier discussion. If I have to really understand this performance over a bit of medium term, right? I mean, the quarter volatility keeps on happening, but if I look at next two, three years and your experience into this industry, both in terms of volume growth, pricing, and margins, like typically at this current pricing of polystyrene and ABS, how should the Indian market actually behave in terms of both customers and manufacturers in terms of how would they expect this to actually play out over a three-year time frame? So, both from a demand-supply perspective and from a manufacturer margin perspective, cyclicality in this industry right now, we’re seeing normalization of margins after COVID. Has this happened in your view? How do you see pricing moving further in India and outside India imports? Some comments over there on industry level and from an Indian manufacturing level will help. So that’s the first question.
Rakesh Nayyar
Rahul, polystyrene is not separated or differentiated from other polymers. The cyclicality which you see in the other polymers, we get to see in this once in a while. The demand as far as India is concerned will grow because of the thirst on the exports, PLI schemes. And the affluency level going up in India, the Indian OEM appliance manufacturers, be it air conditioners, refrigerators, washing machine guys, or even the smaller appliances people, all are out there to increase their capacity, and new capacities are coming up in the electronics and electricals.
The demand for polystyrene is bound to grow there, and we do not see that there will be any setback or there will be any issues with regard to the growth. It is — as far as we are concerned, as I said earlier, we — currently, we are operating at 80% of our capacity. And though we have margins still, but going forward we may have also to look at de-bottling our plant or increasing our capacity at our existing complex at Amdoshi.
Now, as far as the prices or margins are concerned, much gets determined by the events happening globally also. We are not separated or isolated from the world. So, if the — there is a price pressures, the deltas, global deltas go down, and that eventually gets reflected in the domestic market as well. So, I will only talk about the demand. In India, demand is bound to increase, and it will increase. There will be minor setbacks, like last year we had first six months there were no lifting by the OEMs, reduced lifting by the OEMs because of the extended monsoons and early monsoons. So, all those issues will come up, but on a year-on-year basis, the demand for polystyrene will grow.
Rahul Agarwal
Right, sir. But as you said, December obviously indicates that there is some stabilization on styrene monomer pricing, offtake is better. Purely from what we’ve seen last 10 years, current pricing looks like pretty much at low levels. The INR depreciated significantly in January, right? So, would that mean that incrementally, if I take a next three-year view, do we think there is a bottom here, or do you think incremental global supply can actually take this styrene monopriser [Phonetic]? It’s still difficult to predict that. There will be some marginal cost of production cost, right, for global monomers [Phonetic]?
Rakesh Nayyar
See, styrene monomer again is not in place in isolation. Styrene monomer is also a combination of ethylene and benzene, and the styrene producers can only withstand the fall in prices, their selling prices, up to an extent. If the fall is more, they are losing money. They are bound to shut down their units for one reason or the other reason. And the prices will fall, but then after a period they are bound to go up. So, there is a limit up to which the prices can fall. And I — we think that with the current set of the benzene or ethylene and everything, the prices had already fallen too much, and that is why now they are witnessing some stability and may have — with an upward bias a bit. But let’s hope this continues for a while.
Rahul Agarwal
Get it, sir. Secondly, sir, on ABS, on the import trends, right? ABS is a larger quantity of import in the country. We saw BIS removals happening sometime in November, December. I don’t know why, but there are a lot of polymers where BIS was removed. Clearly, it means that there is shortage and the country domestic capacity cannot meet demand in the country. But have we seen higher Chinese imports happening in ABS? Maybe some comments on the quantity, the country. You mentioned something on the polystyrene side where we are seeing imports from Thailand, but anything on the ABS side, what kind of changes are expected globally in terms of supply-demand, how could that behave going forward?
Rakesh Nayyar
The ABS supplies to India are mainly from Korea and Taiwan, and Chinese exports to India have been negligible. The BIS getting removed certainly opens a window for China to start supplying to India. But then there are other issues there because depending upon the location of the plant, because if there are plants inland in China, their local freight there and freight from China to India, all those issues are there, and their quality also. See, the — so it’s a difficult to say whether they will replace the Korean demand or they will replace the — sorry, the Korean supply to India or the Taiwanese supplies to India. But then, as of now, the Chinese supplies to India, as far as ABS is concerned, they are practically nil.
Rahul Agarwal
And in history, has that ever happened? Because I also did some channel checks. Looks like distributors have to say that the material is not very linear in supply. Sometimes they sell, sometimes they don’t really have the material. And second is…
Rakesh Nayyar
Yes.
Rahul Agarwal
As you said, the matching of colors and quality with customers is a big headache, right? So ultimately, it has to be more consistent supply of quality.
Rakesh Nayyar
Yes.
Rahul Agarwal
Would I take a guess that ABS from China actually will not really come? It will continue with Korea and Taiwan, which is good quality material? And this ABS pricing should stabilize here.
Rakesh Nayyar
People will prefer to continue with the existing suppliers, but the trader mentality, you never know. And the people who are not conscious of their end product quality here, they may source the material. It is very difficult to say because the — it’s very dynamic situation. So, assuming, yes, the — if the quantities come in, I presume that the quantities, if they come from China, they will be minimal. The main quantities will continue to come from Taiwan and Korea.
Rahul Agarwal
Right. And anything on the global demand supply of ABS? I mean, this China-Korea pricing, would that be suppressed for a while now, or is it also pretty similar to what we’re seeing in polystyrene?
Rakesh Nayyar
See, again, because of the global demand, styrene prices, ACN prices, the butadiene prices, the ABS prices had also fallen considerably. But with the SM price now getting stabilized, butadiene price going up, so the ABS price will also inch up now. At least in the domestic Indian market, the prices have already increased.
Rahul Agarwal
Got it, sir. Perfect. And sir, last question on the trading value or volume, whatever you want to share for the third quarter and nine months?
Rakesh Nayyar
The — our trading volumes are now close to 20% of our total turnover.
Rahul Agarwal
This is for nine months or for the quarter?
Rakesh Nayyar
Nine months as well as quarter, yes.
Rahul Agarwal
And how much was this YoY? Will there be a number for that?
Rakesh Nayyar
Last year they were in more — they were, I think, closer to 22%, 22.5% or so, but this year the trading volumes are around 20%.
Rahul Agarwal
Perfect. Got it, Rakesh ji. Thank you so much for answering all the questions and wish you all the luck.
Operator
Thank you. The next question comes from the line of Kirtan Mehta with Baroda BNP Paribas. Please go ahead.
Kirtan Mehta
Thank you so much for the opportunity. One question on the ABS plant, how many months of depreciation we have booked in the quarter, and what could be the quarterly depreciation run rate from Q4?
Rakesh Nayyar
The — we have booked the depreciation for the full quarter. Plant has run, so we have — it’s been put to use. So, the depreciation has been booked for the full quarter. Whatever incremental depreciation you are seeing from the previous year is all for the ABS as well as the — our new SPC lines.
Kirtan Mehta
And with this, 270 million-odd will remain now the depreciation rate looking forward in terms of…
Rakesh Nayyar
Yeah, that’s right.
Kirtan Mehta
Right. Thank you so much.
Rakesh Nayyar
Plus, whatever we capitalize going forward for any other project. But as of now, assuming the current capacities are at — current plants are there, so 270 million is for depreciation per quarter will be there.
Kirtan Mehta
Thank you. Second question was about — there has been some closures being talked about in Korea as well as Europe, plus there will be some China anti-pollution policy could get sort of announced during the China. Do we have any sort of understanding whether this will result in any closure of the capacities in our chemical chain?
Rakesh Nayyar
We have also read that, we have been told about that, but eventually the smaller — what we consider is that once these are announced, the smaller old plants which do not meet the — their new environment norms and pollution-related norms, they will close down. And they — because they are very concerned now in China with regard to the energy consumptions and others. But then how much of that will go away from the market is still not known. Once the policy is announced, and we will get to know after three months, four months, that finally what has been the impact of that.
Kirtan Mehta
Right. Would we have an idea about average utilization rate globally in our chain? Are they significantly below 80%?
Rakesh Nayyar
See, as far as China is concerned, there the average utilization rates are closer to 55% — 50%, 55% depending upon the products. That’s what we are informed.
Kirtan Mehta
Right, sir. Thank you.
Operator
Thank you. The next question comes from the line of Radha with B&K Securities. Please go ahead.
Radha Agarwalla
Hi sir, thank you for the opportunity. Sir, considering the improvement in offtake from OE since December and also improvement in signing prices, do you believe that third quarter performance is the bottom and can we expect sequential improvement from here on?
Rakesh Nayyar
The next quarter, that is the current quarter of January to March, will certainly be better because the OEM demand in this quarter is always the strongest. And with the prices of styrene getting stabilized, the — we hope, yes, we will certainly be doing much better than the last quarter.
Radha Agarwalla
All right, thank you. Sir, secondly, you have been trying to increase the export sales, especially to European Union. When do you expect these numbers to start reflecting? And what has been the changes in the supply chain in our key export markets like Europe, Middle East, Africa in the last six months?
Rakesh Nayyar
See, the demand from Europe It’s been very erratic because the — there have been some segments or some nations, there were no demands coming up, but they also have their local capacities there and the demand is low. And also, we hope that our demand will certainly pick up from India once the India-EU FTA is signed. And if once that is done, yes, then we — the Europe will fully open for us and we will be able to compete with the other nations who have an FTA agreement with EU. But otherwise also, the demand from Europe was kind of dull in the last nine months.
Radha Agarwalla
All right, so thanks. Sir, last question, what is the fixed cost per month of running the ABS first line facility?
Rakesh Nayyar
I won’t be able to share that with you, Radha. The only — the depreciation is the fixed cost, which is the major fixed cost for us, and that incremental depreciation is there, which is closer to INR8 crore a quarter for us.
Radha Agarwalla
Okay, sir. Thanks, and all the best to you.
Operator
Thank you. The next question is a follow-up question. It’s from the line of Nirav Jimudia with Anvil Wealth. Please go ahead.
Nirav Jimudia
Yeah, sir, thanks for the opportunity again. Sir, just two clarifications. So, one on the Xmold side, last time when we had a call, you mentioned that the utilization rates were closer to around 79% for six months and 72% for the second quarter. So how it has been in Q3? And just a clarification on the compounding capacities, I think my understanding suggests that combining us and Xmold, we are today at around 60,000 tons of compounding capacity. So, if you can just help me with that.
Rakesh Nayyar
Yes, as far as Xmold is concerned, they have been on trying to get new customers, and the old customers who are either not good paymasters or wanted extended credit lines and all that, we have been kind of staying away from them now. And I’m happy to tell you that the two of the large OEM suppliers had sampled their product, their required compounds. And one of them, they have been happy, and one of them has already given the orders. Sample orders have come in. The other one is in the process of giving us the orders. And the third large consumer of compounds is also coming now. In the next few days, they will also be coming in.
So, it’s a transitional period, and we are confident that the Xmold in the next financial year would be significantly increasing their utilization rate there. The current — from their current volumes, they should be going up by almost 20%, 25% increase in their volumes in the coming year now.
Nirav Jimudia
Got it, sir. And with respect to our capacities in terms of compounds, like with the recent addition of the ABS line, when can we say that, like, or have a visibility in terms of going closer to the full utilization levels before we plan any capex there.
Rakesh Nayyar
We are waiting for our ABS now to start, and once that happens, then we’ll be able to more and more use our compounding lines then, which we have set up.
Nirav Jimudia
Correct. Thank you so much, sir, and wish you all the best.
Rakesh Nayyar
Thanks.
Operator
Thank you. The next question comes from the line of Aditya Khetan with SMIFS Institutional Equities. Please go ahead.
Aditya Khetan
Yeah, thank you, sir, for the follow-up. Sir, just a couple of questions. Sir, any update on EPS phase 2 expansion? And sir, what sort of maintenance capex we would be taking in FY ’26 and ’27? And apart from like phase 2 ABS and Haryana, any other new capex or new businesses like we have identified, considering we are having a good amount of cash on the balance sheet?
Rakesh Nayyar
Your question was that how much capex we are going to incur in the coming years?
Aditya Khetan
Correct, sir. So, maintenance capex and the growth capex, both.
Rakesh Nayyar
Yeah, so the — we estimate that we will be doing around INR250 crores to INR275 crores of capex in the coming year. So that is our estimation. And as far as any other location is concerned, no, we are only concentrating at our Chennai, our Amdoshi, and whatever developments we do at — now at the Panipat. These are the three locations. And as far as the EPS phase 2 is concerned, that should be going operational in the coming month in February or by March, that should be operational.
Aditya Khetan
Okay, okay. Sir, just one fundamental question. Sir, on ABS, is there any volumes which has been booked in this quarter or everything has been converted into compound?
Rakesh Nayyar
There is no booking of volume because the material is produced and sold. It is — we have various grades. The orders come in, they go, but right now we are not taking any orders also because until otherwise we are satisfied the plant is up and ready after this mishap what has happened. So, no orders have been taken.
Aditya Khetan
Okay, okay. So, sir, now the focus remains on the Haryana project only and the phase 2 of ABS?
Rakesh Nayyar
Yes, that’s right.
Aditya Khetan
Okay, got it. Thank you.
Operator
Thank you. The next question comes from the line of P. Venkatesh with Corporate Database India Private Limited. Please go ahead.
P. Venkatesh
Thank you for the opportunity, sir. Just wanted to understand, is — are we covered with — for the loss of production of the ABS plant? Secondly, the proprietary manufacturers, have they encountered any such problems in their earlier projects, or is this something which has uniquely happened in our project? And thirdly, can you please let us know how — what is the progress on — how has the XPS segment fared till in the current year? Thank you.
Rakesh Nayyar
The — our collaborators or the equipment suppliers, they’re also shocked because this is the first time they are encountering this kind of an incident. They have never had any such incident in the past at any other location. As far as insurance is concerned, the plant is under warranty and is fully insured. And XPS is concerned, yes, XPS demand barring the rainy season and all that has been doing well. We are currently operating our XPS at around 70%, 75% utilization.
P. Venkatesh
Thank you, sir.
Operator
Thank you. We have our next question. It’s from the line of Rahul Agarwal from Ikigai Asset. Please go ahead.
Rahul Agarwal
Yeah, hi, thank you for the follow-up. So just two basic questions on the mass ABS side. Firstly, I understand that ABS is a credit market, the channel needs, kind of 40-, 45-day credit at least, to monetize their own sales and then pay back to you. Historically, obviously, polystyrene has been very lean in terms of receivable cycle. Incrementally, how would you deal with this situation in terms of the ABS customer obviously need more credit? So, we’ll be in line with the industry. Any thoughts on this in terms of how do we manage this?
Rakesh Nayyar
Rahul, see, when we came into the polystyrene and EPS market, the credit periods are also very long. It all depends upon the product supply, the quality, and the kind of discipline we want to follow. And like I just said, in — for our Xmold also, the customers who wanted extended credits or they were defaulting in payments, we have kind of said no to them now for future supply. That has, of course, reduced our volumes in the interim, but we know going forward it will be good for us. And here, we will have to talk to the other players also to change the credit period pattern, maybe. But then I’m sure this can be curtailed from 45 days to 30 days, or maybe lower numbers. It’s not a very big issue there as far as the credit terms are concerned.
Rahul Agarwal
Okay, okay. And secondly, as we’ve been saying that as the customers test samples, or there are matching issues which come up, ultimately it all gets sorted once the supply is on time and the mixing is done. Incrementally, what we’re saying is domestic customers who are right now using ABS either from imports or from existing suppliers will try and have some kind of 5% to 10% mixing in the existing product purely to get more whiteness, more gloss. And then that’s how this business will actually evolve over time. Is this understanding right, or is it going to be only new products?
Rakesh Nayyar
No, I don’t think it will be getting mixed with that material. Maybe if they want to do compounding or something, they can do it, but then otherwise the master batches and other will be made for these grades, which are being done now by many. And for certain colors, because this — eventually the master batch cost will come down for our material. The pigments you need for this, because it’s white base, so to color a white base requires less of a pigment as compared to coloring an ivory color or a creamish color or a yellowish material.
So over time, once the grades are developed This will become a preferred material then, and the colors will eventually be the same. The — because there the master batch would be used more, or a different master batch, and here it will be used a different master batch, but eventually they will match the color. There’ll be no mixing of the — that they will mix 10% of this with 90% of that. That can be done in compounding business, yes. But not for — on a regular basis. I don’t think — that’s my understanding.
Rahul Agarwal
Right, right. So basically, what you’re saying is whatever, 150,000 tons kind of ABS imported today will replace that market with our products once the customer is satisfied with the company, the master batch mixing and stuff, right?
Rakesh Nayyar
That’s right.
Rahul Agarwal
And then that material is comparable to the existing ABS which is getting sold on a value-added basis from other suppliers in India? Is that correct?
Rakesh Nayyar
Yeah, that’s right.
Rahul Agarwal
Okay. Okay, great, sir. Thank you so much. Have a good evening. Thank you.
Operator
Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing comments.
Rakesh Nayyar
Thank you all for participating in the earnings con call. If you have any further questions or would like to know more about the company, please reach out to our Investor Relations managers at Valorem Advisors. Thank you so much. Thank you.
Operator
[Operator Closing Remarks]