Supreme Petrochem Ltd (SPLPETRO) Q4 FY23 Earnings Concall Transcript

Supreme Petrochem Ltd (NSE:SPLPETRO) Q4 FY23 Earnings Concall dated Apr. 27, 2023.

Corporate Participants:

Anuj Sonpal — Chief Executive Officer

Rakesh Nayyar — Executive Director & Chief Financial Officer

Analysts:

Aditya Khetan — SMIFs Institutional — Analyst

Shailesh Kejariwal — B&K Securities — Analyst

Unidentified Participant — — Analyst

Abhishek Getam — Alpha Invesco Research — Analyst

Ravi Mehta — Deep Financial Consultants — Analyst

Rushabh Shah — Anubhuti Advisors — Analyst

Sandeep Kothari — East Lane Capital — Analyst

Aatur Shah — ICICI Prudential AMC — Analyst

Keshav Garg — Counter Cyclical Investments — Analyst

Harsh Shah — HSBC Mutual Fund — Analyst

Rohit Ohri — Progressive Share Brokers Pvt Ltd. — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to the Supreme Petrochem Limited Q4 FY ’22 Earnings Conference Call. [Operator Instructions] I now hand the conference over to Mr. Anuj Sonpal from Valorem Advisors. Thank you, and over to you, sir.

Anuj Sonpal — Chief Executive Officer

Thank you. Good evening, everyone, and a very warm welcome to you all. My name is Anuj Sonpal from Valorem Advisors. We represent the Investor Relations of Supreme Petrochem Limited. On behalf of the company, I’d like to thank you all for participating in the company’s earnings call for the fourth quarter and financial year ended 2023.

Before we begin, let me mention a short cautionary statement. Some of the statements made in today’s con 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’s beliefs as well as assumptions made by and information currently available to 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 call is probably to educate and bring awareness about the company’s fundamental business and financial quarter under review.

Let me now introduce you to the management participating with us in today’s earnings call and hand it over to them for opening remarks. We have with us Mr. Rakesh Nayyar, Executive Director and Chief Financial Officer; Mr. Dilip Deole, Chief Executive of Finance and Accounts; Mr. Dan Mishra, Company Secretary. Now, I request Mr. Rakesh had to start with his opening remarks. Thank you, and over to you, sir.

Rakesh Nayyar — Executive Director & Chief Financial Officer

Thank you, Anuj. Good evening, everyone. It’s a pleasure to welcome you to our first ever earnings conference call for the fourth quarter and financial year ended 2023. Given that this is our first earnings con call in the interest of some of you who are the company.

Let me first start by giving a brief overview of the company. Supreme Petrochem was formed at the joint venture be transit Industries and Rajasa investments. It started commercial activity in October 1995. Company is the leading manufacturer of polystyrene and expandable Polystar in India. In polystyrene business, we have a market share of about 60%. And as we are the largest exporter of polystyrene from India, we into expanded polystyrene in 2006, and since then, we have also become the market leader in this segment as well. Company’s other products include master batches and compounds and extruded polystyrene and XPS insulation on boards, which is used for the green buildings and for insulation purposes company is further enhancing its product range by setting up a new ABS Mass ABS plant that the mass Central beta in siding [Phonetic].

In technical license from misses were sales of Italy for its production with low carbon footprint. Company is today well placed to benefit from the expected pickup in the domestic consumer durables and automobile sectors. It has a strong balance sheet with zero debt and we are funding our capex of about INR1,200 crores without any external borrowings all from companies owned funds. Now let me brief you on the financial performance of the fourth quarter and then for the full year ended March 23. The operational income for the quarter was INR1,317 crores, which declined by about 7% year-on-year and increased by 17.5% on a quarter-on-quarter basis.

EBITDA reported was INR209 crores, which declined by 32% year-on-year and increased by approximately 76% quarter-on-quarter basis. And the EBITDA margin stood at 15.06% for the quarter. Net profit reported was INR16 crores, which declined by 29% year-on-year and increased by 78% quarter-on-quarter, while the PAT margin was 11.52% — this decline in revenues and margins was primarily due to reducing global deltas between the price of raw materials and company’s product price.

Coming to the financials for financing year financial year ending 2023, the operational income for FY ’20 stood at INR5,287 crores, an increase of 5% compared to FY 2022. Operating EBITDA stood at INR658 crores, declining by 27% year-on-year, with EBITDA margins reported at 12.45%. Net profit stood at INR498 crores, declining by 25% year-on-year with PAT margins at 9.42% during FY ’23. On the operational front, total sales volume of the manufactured products increased by 17.8% in quarter 4 FY ’23 over the previous quarter, and increased by 4.8% in FY ’23 over the previous year. Domestic sales on a sequential quarter-on-quarter basis increased by 17.9%, while broadly remaining static on a year-on-year basis. Prices price of styrene monomer, which is our main raw materials have remained stable since August 2022; the more small range there [Phonetic].

On the capex front, our brownfield expansion projects for enhancing existing polystyrene and expandable polystytine capacities at company’s Amdoshi plant driver and at EPS capacity at its plant at Tamil Nadu are now complete. Company’s effective capacity for polystyrene now stands at 300,000 tonnes per annum, and expandable polystyrene capacity now stands increased to 110,000 tonnes per annum. The first phase of Mark ABS project with 70,000 tonnes per annum capacity and the license from Versalis is progressing as per tubule. Company plans to incur about INR430 crores in the current year on ongoing ABS project, EPS second phase expansion and extruded polystyrene foam board second line apart from the normal capital expenditure. Lastly, the Board recommended a final dividend of INR7 per share.

With this, we can now open the floor for the question-and-answer session, please. Thank you.

Questions and Answers:

Operator

[Operator Instructions] Ladies and gentlemen, we will wait for a moment to take our first question from the line of Aditya Khetan from SMIFs Institutional.

Aditya Khetan — SMIFs Institutional — Analyst

Congress for a good set of numbers. Sir, third question is on to the utilization of the Polish tied the expandable policing the capacity. So what was the utilization for the current quarter? And what is the expected time line of peak ramp-up of these 2 projects this year funding the capacity?

Rakesh Nayyar — Executive Director & Chief Financial Officer

For the year ’22, ’23, we — the capacity utilization for both Polystar and expandable polystyrene were above 92%. Since the — our new capacities have just commenced in the month of March, the going forward in the current year, we hope that as soon as these new capacities are concerned, they would be utilized to the extent of maybe 60%, and gradually, they will ramp up [Phonetic].

Aditya Khetan — SMIFs Institutional — Analyst

So for FY ’20 billion sorry, for FY ’24, and then it will be guide.

Rakesh Nayyar — Executive Director & Chief Financial Officer

That is the new capacity I’m talking about.

Aditya Khetan — SMIFs Institutional — Analyst

Okay. And sir, how much would be the trading revenues in 2023? Like in FY ’22, sir, it was around 25%. So similar how much would be the figure in FY?

Rakesh Nayyar — Executive Director & Chief Financial Officer

Our trading revenue for the year ’23 is around 22% to 23%.

Aditya Khetan — SMIFs Institutional — Analyst

Okay. And sir, this will remain stable for the next coming years — so around 20% to 25% into the same rate. So the quarterly jumping spread of polystyrene and all other segments. So that has been quite phenomenal. So just I wanted to understand what has led to such steel price in the spreads on quarter-on-quarter basis. Is there any fundamental change into business because the price into the spread. So whether the demand has gone up, how some capacity globally has been shut so because of where your exports have gone up. So what has actually changed that I entered on.

Rakesh Nayyar — Executive Director & Chief Financial Officer

See, January to March quarter is generally the peak quarter for the consumer durables — that is the time when they start building up the product for the sale during the summer months, the refrigerators, the air conditioners and all of that. So there is a demand pickup always, which starts from the second half of the second fortnight or the second half of December until March onwards. So the January to March quarter, always the demand is better. And that is the reason this time also when you compare quarter-on-quarter basis, the sale has been better. The — as we said, the sale was almost 17% better than the previous quarter. So it is the OEM demand. It is a seasonal demand, which always comes up in the January to March quarter.

Aditya Khetan — SMIFs Institutional — Analyst

Okay. So these demands wouldn’t be there for the next 2 quarters at least from here on? So can we expect that to normalize?

Rakesh Nayyar — Executive Director & Chief Financial Officer

The next quarter, that is the April, March or April, June quarter. Yes, that is the first quarter of the 24 because he may in any way, the demand is good and then June is start tapering off. And then after the — once the rain start, the demand slows down a bit. And once again, when the fast will sell start the demand picks up of all these OEM products. So the demand — it moves along with the OEM demand and we believe there.

Aditya Khetan — SMIFs Institutional — Analyst

The capacity expansion, which we had lined up. So apart from the ads business, which will come by 2025, ’26. So apart from that, so what is the management guidance in terms of top line and EBITDA growth, 4 businesses, iconic?

Rakesh Nayyar — Executive Director & Chief Financial Officer

Can you repeat your question and not clear.

Aditya Khetan — SMIFs Institutional — Analyst

Sir, my question was on to the top line and EBITDA growth for the next 2 to 3 years, apart from the ABS business, which will come by INR2,250 [Phonetic]. So excluding that, so from the core businesses, how the growth would be for the next 2 to 3 years? — is the top line?

Rakesh Nayyar — Executive Director & Chief Financial Officer

Top line, I can comment. The top line growth will come from the volumes. Now with the new capacities available to us, the volume growth will happen. And as far as the EBITDA is concerned, or the margins are concerned that they are linked to many external factors. So the though like in the year ’21, ’22, the margins were very high because of the disruptions in supply chain, very high freight rates. Now the deltas between the Staramonomer and the finished products, they are at very normal levels. So the growth will come from the volumes…

Aditya Khetan — SMIFs Institutional — Analyst

Okay. And sir, any sort of number like a 10%, 12% or 15% growth, which we are anticipating?

Rakesh Nayyar — Executive Director & Chief Financial Officer

I will talk in terms of volume, the volume growth what we are anticipating in the year ’23, ’24 is around 15% to 16% for ’23 [Phonetic].

Aditya Khetan — SMIFs Institutional — Analyst

Okay. Sir, the last question on to the Capex. You had given a figure into your opening commentary. What was the figure for FY ’22 and ’25. And what is the maintenance capex for this year and we can build for the next 2 years?

Rakesh Nayyar — Executive Director & Chief Financial Officer

This capex number which I gave you includes the maintenance capex and also the ABS. And the EPS second phase as well as the XPS second line. 24-25 also, the similar expenditure would be there.

Aditya Khetan — SMIFs Institutional — Analyst

So INR450 crores, INR450 crores that we can build in?

Rakesh Nayyar — Executive Director & Chief Financial Officer

430 million [Phonetic] is the number I gave for this year.

Aditya Khetan — SMIFs Institutional — Analyst

Thank you.

Operator

Thank you. In the interest of time and to next question from the line of Shailesh from B&K Securities.

Shailesh Kejariwal — B&K Securities — Analyst

In last 2 years, a lot of capacities have been added in Styrene Monomer in China. So this eventually will push more capacity in the downstream products like polystyrene and BPF. Now China is also opening. So do you still expect market to balance out. So basically, I wanted to know what are the factors in your view will be supporting for the company to sustain or improving the profitability?

Rakesh Nayyar — Executive Director & Chief Financial Officer

China has become surplus or they are becoming self-sufficient as far as siding is concerned. China over the next couple of years is planning to add or they will add around 3 million tons of polystyrene. But then China’s earlier imports of polystyrene will slow down and China’s own demand is also likely to grow as per the market reports and research reports is likely to grow by almost 5% to 6% per annum. So the styrene is there, the downstreams will also come in there and — but then the demand is also growing. So we don’t anticipate that there will be any impact as far as the Indian market has come. The Indian market is also growing, and we expect that the Indian market will also grow in line with our GDP if we grow as well as the polystyrene and expandable polystyrene is concerned. The styrene is concerned, China is adding almost 10 million tonnes. And China is right now maybe a small importer, but then eventually, it will be fully self-sufficient. And that will help ease out the staring availability for the Indian consumers are, which is good for us.

Shailesh Kejariwal — B&K Securities — Analyst

Okay. Sir, as you always say, more than Delta in PF and on payback period is the key trial metric you always look at. So mass ABS, we are going in 2 phases. And total capital, we are going to repay around INR350 crores. So what is the payback you’re looking for? And how many years it will take for us to bring the capacity 1420?

Rakesh Nayyar — Executive Director & Chief Financial Officer

The mass ABS, we are investing INR850 crores for both the phases. That is the 2 lines of 70,000 tonnes each. Right now, currently, we are progressing with the first line. For the second line and its configurations, we are currently still discussing with Versalis. And the Mass ABS will be a new product for Indian market. And we — what we expect is in the — it will take us almost 2 to 3 years to ramp up the capacity and come to the rated capacity of the plant. Our calculations are that once we reach the 90% capacity utilization, we should be able to recoup our capital cost in less than 4 years or so.

Shailesh Kejariwal — B&K Securities — Analyst

Okay. Great, sir. How much trading we have done so in ADS last year ’23?

Rakesh Nayyar — Executive Director & Chief Financial Officer

I — I’m sorry, I won’t be able to give you that number.

Shailesh Kejariwal — B&K Securities — Analyst

Okay. Okay. Sir, one last question. Sir, in the new PS and EPS capacity, so according to you, you said maybe 2, 3 years, we can find the capacity. What is the payment you are expecting here?

Rakesh Nayyar — Executive Director & Chief Financial Officer

Yes, around 4 years again, please.

Operator

We take the next question from the line of Niraj Maratha [Phonetic] from Sentinel Research. Please go ahead.

Unidentified Participant — — Analyst

I just wanted to understand the difference between the marked production versus the normal ADS to production in terms of the capex as well as in terms of the application. So on a market base, are the applications lower than the normal ads from a technical point of view, if you can just provide some details on that.

Rakesh Nayyar — Executive Director & Chief Financial Officer

Mass ABS is a continuous process whereas the conventional ABS is the — it’s a kind of a batch process where you produce your high graph rubber in one stage. The second product is a sand and then there is a compounding of done without these 2 products with other things, and that’s how you get conventional ABS. Mass ABS has the [indecipherable] that it is a continuous process directly from the reactor has no carbon footprint and also the utility consumption or the manpower consumption and the overheads would be lower than the conventional ABS. As far as the end users are concerned, end users are the same. Global has brought our premium base. And the — wherever the conventional AVS can be used, the masses can also be used.

Operator

We’ll take your next question from the line of Abhishek from Alpha Invesco.

Abhishek Getam — Alpha Invesco Research — Analyst

Yes. Am I audible, sir?

Rakesh Nayyar — Executive Director & Chief Financial Officer

Yes.

Abhishek Getam — Alpha Invesco Research — Analyst

Sir, my question was regarding mass APS. So sir, we — currently, India consumes around 250,000 metric tons. And if we put to whether all the 3 players combined capacity under imports, so we sort of at over capacity utilization. So how do we see this panning out? Or are we completely subsiding imports?

Rakesh Nayyar — Executive Director & Chief Financial Officer

Yes. Now the last year imports are estimate that is the FY ’23 total consumption is estimated close to 300,000 tons of ABS in India, of which almost 45% is imported. And our total capacity of both the phases put together is 140,000 tonnes. And by the time we implement this project, there will be demand will grow. And the — again, I — we estimate that the demand of ABS with the increase of the automobile consumption and EV is coming in sales, the demand will grow at around 5% to 6%. So the demand for ABS will be far excess of the total capacity available in the country even when we come with both the lines. Imports will be partly — imports will be substituted partly the new demand will be met.

Abhishek Getam — Alpha Invesco Research — Analyst

Okay. Okay. Understood. And then a follow-up on that. So globally, roughly 90% capacities are in even areas and 10% in March. So why have we chosen mark over event end-applications?

Rakesh Nayyar — Executive Director & Chief Financial Officer

The end applications are same, the — this technology is closely guarded as well as the old plants are all on the emulsion basis. It’s the new capacities, which are — and those who get the technology are setting up the Mass ABS. Mass ABS has the advantage of low carbon footprint. And also, as I explained earlier, the Mass ABS has an advantage in terms of the utility consumptions and the manpower consumptions. And since it’s a continuous process, it’s a safer product.

Abhishek Getam — Alpha Invesco Research — Analyst

Okay. Okay. So roughly Matas [Phonetic] margin can be better than merchant tight — so do you see any sustainable margin profile is a what is this sort of guidelines or?

Rakesh Nayyar — Executive Director & Chief Financial Officer

No. The selling price remaining the same, the conversion cost may be lower in the case and will be lower in the case of mass ABS.

Abhishek Getam — Alpha Invesco Research — Analyst

So margin profile, capex?

Rakesh Nayyar — Executive Director & Chief Financial Officer

Yes.

Abhishek Getam — Alpha Invesco Research — Analyst

Any, when we took the Matas project, any sort of margin aspiration we get? Or it will seem be…

Rakesh Nayyar — Executive Director & Chief Financial Officer

Is the global price, the all commodity and all polymer prices are benchmarked with the global landed prices. So whatever are the global margins would be available to ourselves.

Abhishek Getam — Alpha Invesco Research — Analyst

Understood.

Operator

We take the next question from the line of Ravi Mehta from Deep Financials.

Ravi Mehta — Deep Financial Consultants — Analyst

My question is on the spreads. When I look at the data availability, the commodity spreads are coming off, but the company’s performance has been quite better than what the spreads indicate. So are we having some cost-plus kind of contracting in place or some long-term arrangements? Or how are we able to outperform the spreads that we see in the published data.

Rakesh Nayyar — Executive Director & Chief Financial Officer

See, the published data generally of the very — now we have moved on and added many value-added grades where we get some premium. That is the one. Secondly, our costs have been managed well, and our raw material sourcing is also managed too well. So those small savings they always add to our margins then. And plus the premium value-added products give us better realizations.

Ravi Mehta — Deep Financial Consultants — Analyst

Overall basket?

Rakesh Nayyar — Executive Director & Chief Financial Officer

Sorry.

Ravi Mehta — Deep Financial Consultants — Analyst

What would be the share of value-added grades in our revenues?

Rakesh Nayyar — Executive Director & Chief Financial Officer

Would we — our value-added grades are close to around — almost around 37% to 40% now.

Ravi Mehta — Deep Financial Consultants — Analyst

Okay. And what was it like 3, 4 years back?

Rakesh Nayyar — Executive Director & Chief Financial Officer

The 4 years back, we were around I think 25% to 27%. But again, we had — we have improved upon them and commanding a better team there…

Ravi Mehta — Deep Financial Consultants — Analyst

Okay. And those are not like can’t be imported or meaning there is some edge in those grades.

Rakesh Nayyar — Executive Director & Chief Financial Officer

If you look at the import data, you will find that the imports happened at an x price and also x plus $200 also. So there are various grades, various recipes. It depends upon that what is being imported and what is the requirement of the customers there. So the imports can be done, not that they can’t be in turn, but they’ll be added on the not at the published twice what you are seeing there.

Ravi Mehta — Deep Financial Consultants — Analyst

Sure, sure. And on the raw material side, what kind of raw materials we are importing from China?

Rakesh Nayyar — Executive Director & Chief Financial Officer

No, we don’t import raw materials from China. We — our imports have been of our raw material happened from Korea, Singapore [Phonetic].

Ravi Mehta — Deep Financial Consultants — Analyst

Okay. And is it that Chinese imports are beneficial or you’re trying to stay away for any reason?

Rakesh Nayyar — Executive Director & Chief Financial Officer

No, no, we are not trying to stay away because China just started the staring capacity there. And China is still not exporting style. XDs few parcels there and there, but they are not a regular exporter of staling the end.

Ravi Mehta — Deep Financial Consultants — Analyst

And lastly, the volume data that you shared in the presentation, is it only pertaining to the manufactured volumes or it includes the trading volumes?

Rakesh Nayyar — Executive Director & Chief Financial Officer

No, it is only the manufactured volumes.

Ravi Mehta — Deep Financial Consultants — Analyst

Okay. And the trading element in revenues, 22% to 25%, is it like a steady state across cost or it keeps varying for…

Rakesh Nayyar — Executive Director & Chief Financial Officer

No, it’s almost — it’s steady generally.

Ravi Mehta — Deep Financial Consultants — Analyst

Okay. And that would have a small trading margins like 4%, 5% or 2

Rakesh Nayyar — Executive Director & Chief Financial Officer

The colon or EBITDA margin, if you look at the margin to the total revenue because the margins there are very narrow. But it is only since we have the necessary infrastructure built up to handle statin Manager. So the other consumers are starting monomer in the country. They prefer to source it from us because they have saved all the vessels of fund procurement and also the handling it at the at all places.

Ravi Mehta — Deep Financial Consultants — Analyst

Sure. So can we make like 4%, 5% trading margins on that EBITDA level?

Rakesh Nayyar — Executive Director & Chief Financial Officer

No, it depends. I can’t really say 4 or 5 or 3, but then it depends quarter-to-quarter. And it’s not only the volumes remain generally steady for at one…

Ravi Mehta — Deep Financial Consultants — Analyst

Okay. Okay. I’ll get back in the queue.

Operator

We take the next question from the line of Rushabh Shah from Anubhuti Advisors.

Rushabh Shah — Anubhuti Advisors — Analyst

Sir, just — sorry, first question was with respect to the brownfield expansion we concluded. So I wanted to check the new capacity has been operational only from the month of March?

Rakesh Nayyar — Executive Director & Chief Financial Officer

That’s right.

Rushabh Shah — Anubhuti Advisors — Analyst

Okay. Because the consent to operate was received in the month — I think by the end of December itself.

Rakesh Nayyar — Executive Director & Chief Financial Officer

The consent was received earlier in the 30s of 30th December…

Rushabh Shah — Anubhuti Advisors — Analyst

Okay.

Rakesh Nayyar — Executive Director & Chief Financial Officer

By the time the plant is stabilized and so it has started from March. So stabilized production is concerned.

Rushabh Shah — Anubhuti Advisors — Analyst

Okay. So in terms of — I just wanted to understand the inventory value, I think as of 31st March was way higher at INR600-plus crores. So any specific reason why we have built up higher levels of inventory?

Rakesh Nayyar — Executive Director & Chief Financial Officer

There are 2 elements in that inventory. One is our raw material inventory and other is the finished goods inventory. The finished goods inventory is, as I said, that the production — the new lines production started from March onwards. So that has added to the inventory and the raw material inventory has gone up because we had some bunching of shipment arrivals every month of March, and that has added to the raw material…

Rushabh Shah — Anubhuti Advisors — Analyst

Okay, okay. And I think our objective largely from the new capacity is to tap the export market, correct?

Rakesh Nayyar — Executive Director & Chief Financial Officer

At the export market as well as feed be increasing demand in the domestic market also because last year, in the domestic market, during the peak months, we were not fully able to meet the demand, and they were in both. So we will be meeting the demand in the domestic market apart from the general growth in the demand also.

Rushabh Shah — Anubhuti Advisors — Analyst

Okay. Okay. So just in addition to that, can you share the export data or maybe fourth quarter and for complete FY ’23 export volume data?

Rakesh Nayyar — Executive Director & Chief Financial Officer

Our exports last year have been closer to almost — the total exports were close to 8% only and that the total volume.

Rushabh Shah — Anubhuti Advisors — Analyst

Okay, okay. And in terms of the prices, I think raw material prices have largely remained same since August and even I think spreads have largely remained in a narrow band. But I think post March, is there any movement in the prices have those improved? Or are they still stable at to?

Rakesh Nayyar — Executive Director & Chief Financial Officer

They are in the same range. There are no changes here. The prices go, of course, always got in a range of raw field prices have moved, but then they’re all in a band only 5% to 6% here and there. So generally, they have been very stable, very, very stable.

Rushabh Shah — Anubhuti Advisors — Analyst

Okay, okay. And in terms of, I think, Actual location policy in that I wanted to understand. So now while we are targeting some INR800-odd crore plus capex over the next 2 financial years. So is that the reason why we are building a larger cash reserves in the books? Or is it our stated policy that we’ll continue to maintain cash balances at higher level?

Rakesh Nayyar — Executive Director & Chief Financial Officer

No, we have no such policy of keeping higher cash in the books of the company. But now we need that cash in terms of our capex, planned capex. And we — like last year also, we used the cash to reduce the capital and a year before that, we used the cash to do the buyback of shares — so — and a certain amount of cash is essential in the books of the company since because we are also — you must appreciate that we are in a cyclical industry.

Rushabh Shah — Anubhuti Advisors — Analyst

Absolutely.

Rakesh Nayyar — Executive Director & Chief Financial Officer

The industry — always to have a cash cushion in the company is helpful.

Rushabh Shah — Anubhuti Advisors — Analyst

Okay. Okay. So any — basically, any plans of buybacks in the current fiscal or higher dividend policy, which you are envisaging as of now if you can?

Rakesh Nayyar — Executive Director & Chief Financial Officer

Good decisions, I can’t comment on them.

Rushabh Shah — Anubhuti Advisors — Analyst

Okay. Okay. So nothing as of plan. Just wanted to get an update on that.

Rakesh Nayyar — Executive Director & Chief Financial Officer

The stock exchange, we cover [indecipherable].

Rushabh Shah — Anubhuti Advisors — Analyst

Absolutely, sir. But just wanted to check the — do we have any such policies that we’ll be doing that every year or just on…

Rakesh Nayyar — Executive Director & Chief Financial Officer

It’s the verity [Phonetic] of the Board. They keep on reviewing whenever they take a call, it will be known. I have nothing to say on that. Sorry.

Rushabh Shah — Anubhuti Advisors — Analyst

Okay, perfect. And just one last question, sir. In terms of exports, which geographies will be targeting with these new capacities if any you can?

Rakesh Nayyar — Executive Director & Chief Financial Officer

We have been exporting to practically over earlier, we had customers over 110 countries. And since in the last 2, 3 years, we are exposed in hibernation. So we are reviving our old customers. And in a case last year itself, whatever exports we have made, we have made into Africa, Europe, neighboring countries like Bangladesh, — so — but then we will be — and North America also, we have customers. So we continue to concentrate on those. And we are — actually, we are South America and as far as Hawaii also, we have customers. And so we have customers — in Asia, we are in Europe, we have Africa, we have in Americas. So we have to only once we have the capacity built up now available. So we have to gain go and market, nothing new.

Rushabh Shah — Anubhuti Advisors — Analyst

That’s great. I think that was all from my side. Thank you so much for the opportunity.

Operator

We take the next question from the line of Sandeep from East Lane Capital.

Sandeep Kothari — East Lane Capital — Analyst

Rakesh, 2, 3 questions. If you could give us just some sense on what’s the contribution differential between a commodity polystyrene versus master batches, EPS, XPS, just broad sense, what’s the contribution defense?

Rakesh Nayyar — Executive Director & Chief Financial Officer

Are not comparable, very frankly, they are not comparable because master batches are a different thing there and the compounds are very good, different, whether they are a low of many polymers there. So they — again, in a compound business, the product can be as — the pricing could be as low as INR100,000 a tonne to even INR250,000 a ton, so it varies. So it’s very difficult to compare anything between the margins of each vertical. Each vertical has its own flavor and their own standards in terms of margins. And within the ag vertical of polystyrene, we have 14 grades and each grade has a different kind of margin. And when we are in value-added grades, they have different margins. If I are — there is a grid, I’ll tell you which we call as the SCR grade, that is environment stress, crack resistant grade, which is used inside the refrigerator and it’s a very premium grade or the grade which Gillette uses for making the razors, that’s a very premium grade. So those values and their margins are very different. So there are no standard there. So your question, I really can’t answer.

Sandeep Kothari — East Lane Capital — Analyst

So what would be the contribution differential between value-added, which you mentioned 47%, 48% versus…

Rakesh Nayyar — Executive Director & Chief Financial Officer

47%, 48%, I said 37% to 40%.

Sandeep Kothari — East Lane Capital — Analyst

Sorry, yes, 37% to 40%. What would be the differential if x is the margin for commodity value-added would be 1.5x or just broadly to get a sense?

Rakesh Nayyar — Executive Director & Chief Financial Officer

If the margin is x, the other one could be another 25%, 30% more than that.

Sandeep Kothari — East Lane Capital — Analyst

Understood. And over the next couple of years, where do you see these value-added products contribution from 35% to 40%? Could it be 50-50?

Rakesh Nayyar — Executive Director & Chief Financial Officer

Our efforts are on, but very difficult to say. It all depends upon the demand also. Our efforts are to move up in the value chain.

Sandeep Kothari — East Lane Capital — Analyst

Understood. Understood. And last question. Construction industry is a huge consumer of EPS and of course, XPS globally. In India, what would be the triggers? Where do you see construction demand coming for these products over the next, I don’t know, how many years? Or how do you see that evolving? Or what are you doing to make that industry consume more?

Rakesh Nayyar — Executive Director & Chief Financial Officer

See, the — as far as EPS is concerned, the last year, the consumption in the construction sector was only whatever we sold was around 10% to 12%, whereas globally, the consumption is in excess of 50% also in some places. So India has a lot of scope as the DPS consumption in construction is concerned, the road building is concerned. But the processing units, which are needed for making 3D panels or sandwich panels or construction, they have still not come up in a big way in India. And those who are there, the old ones, they have their own constraints. So this is one area that is actually causing not the stopping the growth in the construction industry of EPS. As far as EPS is concerned, yes, all institutional projects, that is the educational institutions or malls or the hospitals or the all government projects, they all — they continue to use the XPS. And that is why from zero, it has taken so many years, so many years wiping the road shows and spending so much of money on the road shows and educating the all kinds — all segments of the people involved with the construction industry, including students in the architecture colleges or the waterproofing and everybody we have tried to educate and ensure the benefits of experience and now casting that there is some mass and it looks like the product will catch on coming in the coming years. It will grow.

Sandeep Kothari — East Lane Capital — Analyst

Understood. And how do you reach that inflection where more of these are used in construction? I understand what you just mentioned about the ecosystem not being there. But if the advantages are there, when do you see the inflection because that could be a massive demand driver?

Rakesh Nayyar — Executive Director & Chief Financial Officer

If government mandates, then we — like many countries, Europe it’s mandatory to use pest Middle East; I see China as is now, even if you want to go and upgrade the building or repair the building, the — in Europe, you don’t get permissions unless and otherwise you agree to do insulation of your building. It’s not the — that necessary that you use XPS Board, any other insulation product also. So it has to be used. In India, that mandation is still not done.

Operator

We’ll take the next question from the line of Aatur Shah from ICICI Prudential AMC.

Aatur Shah — ICICI Prudential AMC — Analyst

Yes, sir. On PS or ABF, any ADD or any duties, et cetera, for imports in India?

Rakesh Nayyar — Executive Director & Chief Financial Officer

Sorry, come again…

Aatur Shah — ICICI Prudential AMC — Analyst

For PS or ABS, any ADD or any import duty, et cetera, that we have for coming…

Rakesh Nayyar — Executive Director & Chief Financial Officer

On ABS, currently, there are no antidumping duties. As far as polystyrene is concerned, DGTR has recommended 2 years back, some duties, but then they have still not been levered by the Ministry of Finance. So currently, there are no duties.

Aatur Shah — ICICI Prudential AMC — Analyst

Sure. And this follows us based on your past experience, where do you think in the cycle we are in terms of CPS and maybe ABS both these products in key?

Rakesh Nayyar — Executive Director & Chief Financial Officer

Can you repeat your question? I am not able to…

Aatur Shah — ICICI Prudential AMC — Analyst

Sure. No, I think based on your experience, where do you think we are in terms of cycle in terms of both PS as well as ABS cycle?

Rakesh Nayyar — Executive Director & Chief Financial Officer

Okay. I think we are very stable at the moment. The Indian demand is growing. And as India is concerned, we are at a steady cycle right now. I won’t say that we are — I’m looking at any slowdown there.

Aatur Shah — ICICI Prudential AMC — Analyst

It would be fair to assume we are in somewhere in between, Dave. We are not either at bottom or top basis just to we have capacity coming in, that’s why I’m asking.

Rakesh Nayyar — Executive Director & Chief Financial Officer

Yes. No, so as — our polystyrene capacity is concerned, the — considering that last year, we were unable to meet the demand in the country, the imports had to take place. And whatever the capacity we have built up at this part of that imports, we will be able to supply. And partly, we will be exporting and there is an export demand available to us. And ABS is still 1.5 years, 2 years down the line for us. But then as I see, there is a lot of traction for ABS because of the EV industry growth, automobile growth happening. There is an appliances growth also small appliances growth happening, there is a demand for ABS. That is the reason the last year, all 40,000 tonnes of ABS was imported into the country.

Aatur Shah — ICICI Prudential AMC — Analyst

Sure. And anyone apart from us adding capacity in both these products maybe within India or…

Rakesh Nayyar — Executive Director & Chief Financial Officer

As far as India is concerned, I’m not aware of anybody else having polystyrene capacity because currently, there are only 2 players. We are there and Styrene’s performance material is there. And as far as EPS is concerned, again, [indecipherable] is there. So if they are doing some revamp or adding some small capacities, yes, maybe I’m not aware. But the new large lines are not being implemented.

Operator

We’ll take the next question from the line of Keshav Garg from Counter Cyclical PMS.

Keshav Garg — Counter Cyclical Investments — Analyst

Sir, actually, I’m new to the company, so please pardon my ignorance. I sir, just wanted to understand that our operating margins would be in mid-single digits until covered. And thereafter, they have more than doubled and now they are in double digits. So is this only due to the shutting down due to accident in LG’s plant in Vizag? Or is it that the international spreads have increased? Or is there some inventory gain that is there in our numbers or a mix of all these factors?

Rakesh Nayyar — Executive Director & Chief Financial Officer

Now let’s say the 2 things have helped ’21, ’22, the international deltas were high. That was, I’d say, they are very healthy. And because of the very high ocean freight, disruptions in supply chain. And there was some plants they had shut down than the — during COVID they were non-operational for some reason or the other reasons. So there was very high delta available. So ’21/’22, that was the reason of the high margins. As far as the 22-23 is concerned, the deltas have come back to the normal. And as our numbers have gone up, our numbers are now better than what pre-COVID levels are there because of the increase in demand and also our volumes have increased substantially; that has helped us.

Keshav Garg — Counter Cyclical Investments — Analyst

So basically, these margins are sustainable and shareholders can expect this kind of 12% double-digit margin?

Rakesh Nayyar — Executive Director & Chief Financial Officer

As on date, the way the global margins are the international prices are, yes, they are similar. And what they have been last 9 months, they are beer. So going forward, what happens globally. I can’t predict.

Keshav Garg — Counter Cyclical Investments — Analyst

Sure, sir. And sir, also, any chance plans of our competitors’ plant starting up LG Chemical [Phonetic]?

Rakesh Nayyar — Executive Director & Chief Financial Officer

See, the matter is currently subsidy. So what happens there? I can’t comment, unless otherwise, the court cases are decided at the core take call, it’s very difficult to comment on it.

Keshav Garg — Counter Cyclical Investments — Analyst

And sir, in terms of percentage, what percentage of domestic demand is being catered to by imports?

Rakesh Nayyar — Executive Director & Chief Financial Officer

Last year, all the year when the demand was good and the domestic players who are not able to meet the capacity the demand. The imports increased in the year ’21 — ’22, ’23. And last year’s number, if I see there, almost 20% of the country’s demand was met through imports — but prior to that always, the imports have been in the range of 8% to 10% of the total consumption of PSD country. As far as EPS is concerned, they are very negligible imports.

Operator

We’ll take our next question from the line of Aditya Khetan from SMIFs Institutional.

Aditya Khetan — SMIFs Institutional — Analyst

Sir, thank you for the follow-up. Sir, during the current quarter, sir, despite an 18% jump in top line, the employee cost and other expenses have declined. So is there a one-off or do you think the sustainable rate we can take for the color.

Rakesh Nayyar — Executive Director & Chief Financial Officer

Again, are…

Aditya Khetan — SMIFs Institutional — Analyst

Sir, during the current quarter, so almost — so then the 17% jump in top line on quarter-on-quarter basis. But your alloy cost and other expenses have declined. So is there a one-off? And…

Rakesh Nayyar — Executive Director & Chief Financial Officer

That happens is in a particular quarter, if there is some performance bonuses or some areas go up. So you are comparing employee cost can change depending upon the whatever — which month we have given the annual increments or bonuses. So — but then on an annual basis is what you should look at our employee costs.

Aditya Khetan — SMIFs Institutional — Analyst

Okay. And sir, generally, in which quarter we will take a maintenance shutdown for PSPS and X?

Rakesh Nayyar — Executive Director & Chief Financial Officer

There is no such definite all depending upon the demand and we decide to take a shutdown. And secondly, it is not that all the lines are shut down together. We shut down the line by line, so that majority of the capacity is always operational for us.

Operator

We’ll take the next question from the line of Harsh Shah from HSBC Mutual Fund.

Harsh Shah — HSBC Mutual Fund — Analyst

Sir, just 2 questions. Firstly, on the end-user industry, you mentioned about demand picking up from sectors like consumer durable, automobile, et cetera. For our company right now for FY ’23, can you just help us understand what has been your revenue breakup in terms of end user mix, how much of that was going through various industries?

Rakesh Nayyar — Executive Director & Chief Financial Officer

So, I don’t have that information with me. I’m sorry. I can for the OEMs — the demand which is there that OEM demand grew last year for us by almost 15%.

Harsh Shah — HSBC Mutual Fund — Analyst

And how much would be a total sales mix into OEM, sir?

Rakesh Nayyar — Executive Director & Chief Financial Officer

It’s almost 50-50 for us.

Harsh Shah — HSBC Mutual Fund — Analyst

Okay. And next year also, when you mentioned that there will be a volume growth of 17% irrespective of where the prices will be. The 17% has been catered through both of the segments? Or is there one segment that is seeing a higher demand?

Rakesh Nayyar — Executive Director & Chief Financial Officer

What I’ve said is the total volume growth will be around 17%. That includes our exports also and the domestic sales also and it will include for the OEM and the non-OEM borders.

Harsh Shah — HSBC Mutual Fund — Analyst

Understood, sir. And just last question from my side. In terms of the demand that is seen in this industry. In terms of new avenues on new demand action drivers, where can you see a new demand coming for our company, which has not been there previously. One thing that you mentioned was EV. Is there anything else?

Rakesh Nayyar — Executive Director & Chief Financial Officer

The other areas would be the smaller appliances.

Harsh Shah — HSBC Mutual Fund — Analyst

Okay. Anything else?

Rakesh Nayyar — Executive Director & Chief Financial Officer

No, no. I don’t recall.

Harsh Shah — HSBC Mutual Fund — Analyst

Okay, sir. No issues. All the best.

Operator

We take our next question from the line of Shailesh from B&K Securities.

Shailesh Kejariwal — B&K Securities — Analyst

What are the go-to-market initiatives we are taking to expand the market in XPS product. So if you look at in Southern region, as per my distributor feedback, our XPS penetration is good in Canada and Bandra state, but [indecipherable] in Karnataka. So what marketing initiatives you are taking there to include the aware of PS products?

Rakesh Nayyar — Executive Director & Chief Financial Officer

I’ll say that your market report is — first, I must appreciate that is very, very good. You are right, absolutely. Kerala a good consumer of experience. In Tamil Nadu though we are making all efforts there, but it’s still not picked up in Kerala. So the — and it’s something very strange. Their houses are taking experience in Kerala but the wholesales are not consuming experience in in terminal node. So we actually have been making all efforts, as I said earlier, that I think we have spent more money on the road shows as well as marketing XPS over BS is concerned, then we initially put money into the project. We have made the road shows not only to the contractors, the architects, the interior decorators, the waterproofing agents, the students. And then, we also ran a course in the few architectural colleges on insulation. So we — that is the reason that over a period of time, not it has from zero, it has reached some mass for us now. and the — also to the government bodies, that’s how it is there in the pea manual also for the procurement of materials.

The experience has been mentioned there now, and all government projects are using Experience. But then what happens is that in the smaller towns, the contractors, they find that it is difficult to install perhaps or they do not have the experience to install it successfully or the waterproofing agents are not fully equipped to do install it. So they shy away and they tell the owners that, look, it will cost you extra money, why you want to put it, whereas not analyzing the cost benefit analysis to them. And that’s the reason the — all institutional projects are using it, but the single unit houses, the growth there is very small at the moment. Once that picks up, then I think the demand will really go.

Shailesh Kejariwal — B&K Securities — Analyst

Okay. Okay, sir. Sir, with the support from vessel is like ABS, can you get into more downstream products in the future?

Rakesh Nayyar — Executive Director & Chief Financial Officer

See, wherever [indecipherable] is there, we will try and get their support, but very difficult to comment because the salad may also see where they want to park technology and where they don’t want to put technology. But then we are talking to them for some other things to help us. And that will be a continuing exercise for us.

Shailesh Kejariwal — B&K Securities — Analyst

Okay. Okay. Sir, one last question. Can you please share product-wise volume data, sir? Is PSPS, SME and other compounds?

Rakesh Nayyar — Executive Director & Chief Financial Officer

See, let me tell you that we are [indecipherable] volumes as well of the manufactured products, they are our revenue line, they almost 90%, and our master gas compounds and XPS are almost around 10% of our revenues.

Operator

We take last question from the line of Rohit Ohri from Progressive Shares.

Rohit Ohri — Progressive Share Brokers Pvt Ltd. — Analyst

Two questions. If you can take us through the capex plan for enhancing Master batches compounds and XPS. And do you think it will be up and running?

Rakesh Nayyar — Executive Director & Chief Financial Officer

All these 3 projects would be through XPS and Masterbatches and Campmaster batches and compounds, actually, there are lines as and when the demand will come, and we will keep on installing over a period of time till 25. And we had planned to spend almost close to INR70-odd crores on the different lines of compounds or ABS compounds and other compounds and master purchase. Xpolterin second line — sorry, expandable second phase expansion is also likely to be over by the next year-end. And ABS, our first line of ABS would be ready by the second half of 2024 calendar.

Rohit Ohri — Progressive Share Brokers Pvt Ltd. — Analyst

Okay. So do we intend to introduce products like Geo-form in India?

Rakesh Nayyar — Executive Director & Chief Financial Officer

We produce the raw material for Geo-form [Phonetic] and it will be to the processes to make Geo-form [Phonetic]. And we have started talking to some processors to enter into the Geo-form [Phonetic] and help them into it. But the — that has still not actually fully matured.

Rohit Ohri — Progressive Share Brokers Pvt Ltd. — Analyst

Okay. And sir, any chance that is it possible to share the EBITDA per tonne for FY ’23 versus FY ’22?

Rakesh Nayyar — Executive Director & Chief Financial Officer

No, I’m sorry, I will not share that.

Rohit Ohri — Progressive Share Brokers Pvt Ltd. — Analyst

Any range or directional growth that you’d like to say a broader range of narrow range?

Rakesh Nayyar — Executive Director & Chief Financial Officer

Monitor the global data that gives you the idea of where we are.

Rohit Ohri — Progressive Share Brokers Pvt Ltd. — Analyst

Thank you.

Operator

Ladies and gentlemen, that was the last question. I’d now like to hand the conference over to the management from Supreme Petrochem Limited for closing comments. Over to you, sir.

Rakesh Nayyar — Executive Director & Chief Financial Officer

Thank you. Thank you all for participating in this earnings call. I hope we were able to answer your questions satisfactorily; and at the same time, offer insights into our business. If you have any further questions, I would like to know more about the company, please reach out to our Investor Relations managers and Valorem Advisors.

Thank you for participating in this evening on the call.

Operator

[Operator Closing Remarks]