Supreme Petrochem outlook revised to stable on weaker performance, delayed ABS facility

India Ratings and Research Private Limited revised the outlook on Supreme Petrochem Ltd. (SPL) and its bank loan facilities from Positive to Stable, affirming the rating at 'IND AA-'. The revision follows weaker-than-expected performance in SPL's existing businesses over the first half of fiscal year 2026 (1HFY26) and a six-month delay in the commencement and ramp-up of its acrylonitrile butadiene styrene (ABS) facility. This deferment impacts the increase in value-added products and near-term visibility on EBITDA reaching INR5.5 bn-INR6 bn.

Lower year-on-year EBITDA generation in 1HFY26, coupled with capital expenditures and rising net working capital, led to an increase in net debt (including acceptances) against a net cash position maintained since fiscal year 2015. Bank loan facilities totaling INR19,000 million have been affirmed at 'IND AA-/Stable/IND A1+'.

SPL's total revenue stood at INR60,234 million in FY25, with an EBITDA of INR5,353 million and an EBITDA margin of 8.9%. The company's net leverage including LC acceptances was -0.7x in FY25. The outlook remains contingent on the ramp-up of recently completed capex and recovery in existing businesses to achieve sustained profitability levels of INR5.5 bn-INR6 bn.