Supreme Petrochem Limited: history, ownership, mission, how it works & makes money

A Brief History of Supreme Petrochem Limited

Supreme Petrochem Limited (SPL) is a leading player in the petrochemical sector in India. Established in 1995, the company has made significant strides in expanding its operations and increasing its production capabilities. Initially focused on the manufacturing of polystyrene and other polymers, SPL has positioned itself as a crucial supplier in the industry.

In the early 2000s, SPL expanded its product offerings to include various grades of polystyrene, expandable polystyrene (EPS), and other value-added products. As of March 2023, the company’s total production capacity stands at approximately 200,000 MT per year. This capacity is achieved through a state-of-the-art plant located in Maharashtra, tailored for producing high-quality petrochemical products.

Financially, SPL reported a revenue of INR 1,200 Crores for the fiscal year ending March 2023, marking an increase of 15% from the previous fiscal year. This uptick in revenue is attributed to both enhanced production capabilities and increasing demand in the domestic as well as international markets.

Supreme Petrochem’s products find applications across a variety of sectors including packaging, construction, automotive, and consumer goods. The company also exports a significant portion of its products, contributing to an export revenue of approximately INR 300 Crores in FY2023.

In terms of market presence, SPL holds around 20% market share in the domestic EPS sector, benefiting from an increasing demand for insulation and packaging materials. The company’s commitment to quality and innovation is reflected in its investment of around INR 50 Crores in R&D in 2022, focusing on developing new product lines and improving manufacturing processes.

The following table summarizes key financial figures and performance indicators for Supreme Petrochem Limited:

Throughout its history, SPL has focused on sustainable practices and compliance with environmental regulations, ensuring that its operations are aligned with the global push for sustainability. This commitment has been integral to securing long-term partnerships with major clients both domestically and internationally.

As of October 2023, the stock price of SPL has witnessed a rise of 25% during the year, reflecting investor confidence and positive market sentiment regarding the company’s growth trajectory. The P/E ratio stands at approximately 15.5, indicating a favorable evaluation compared to industry peers, which typically range between 14 and 18.

In summary, Supreme Petrochem Limited has consistently demonstrated growth and adaptation in the dynamic petrochemical landscape, showcasing resilience and a forward-looking strategy to meet evolving market demands.

A Who Owns Supreme Petrochem Limited

Supreme Petrochem Limited, a prominent player in the petrochemical sector, is involved in the manufacturing of polystyrene and other petrochemical derivatives. The ownership structure of the company is distributed among various institutional and retail investors, with significant stakes held by key stakeholders.

Major Shareholders

As of the latest data available from September 2023, Supreme Industries Ltd., the company's promoting entity, holds a significant 61.08% stake. This indicates a strong internal ownership that can influence strategic decisions and long-term direction.

Institutional investors, including mutual funds and foreign institutional investors, collectively own about 9.01% of the company, which reflects a moderate level of interest in Supreme Petrochem's market potential. The remaining shares are widely distributed among individual retail investors, who account for approximately 30.91% of total ownership.

Recent Financial Performance

For the fiscal year ending March 2023, Supreme Petrochem reported notable financial results:

The company reported a total revenue of INR 3,210 Crores with a net profit of INR 320 Crores. The EBITDA was recorded at INR 600 Crores, indicating solid operational performance.

The company's stock has shown resilience, trading at approximately INR 70 per share as of late September 2023, with a market capitalization of around INR 1,000 Crores.

Ownership Trends and Market Sentiment

Over the past year, the ownership dynamics of Supreme Petrochem have reflected broader market trends. The increasing demand for petrochemical products has led to heightened interest from investors. Institutional ownership has seen slight growth, indicating confidence in the company’s future performance. The company’s focus on expanding manufacturing capabilities and enhancing product offerings aligns with market demands, further supporting its stock performance.

As fluctuations in global oil prices and demand for plastic products continue to impact the industry, Supreme Petrochem's strategic positioning is likely to be crucial. Analysts forecast that as the industry adapts to sustainability challenges, companies like Supreme Petrochem may need to innovate and invest in greener petrochemical solutions.

Supreme Petrochem Limited Mission Statement

Supreme Petrochem Limited, established in 1995, provides high-quality petrochemical products, including polystyrene and expandable polystyrene. The mission statement of Supreme Petrochem reflects its strategic goals and core values aimed at delivering value to stakeholders while ensuring environmental sustainability.

The company emphasizes innovation, operational excellence, and sustainability in its mission. It focuses on enhancing customer satisfaction through quality products and services. This dedication is manifested in their production capabilities, which as of the fiscal year 2022, reached an installed capacity of approximately 350,000 MT for expanded polystyrene.

Supreme Petrochem’s commitment to environmental sustainability is demonstrated through its investments in cutting-edge technology and processes that minimize environmental impact. For instance, their manufacturing facility is equipped with advanced waste management systems and energy-efficient technology, leading to a reduction in carbon emissions by 20% over a two-year period.

Key Aspects of the Mission Statement

• Quality Commitment: Supreme Petrochem aims to adhere to stringent quality standards, with a focus on continuous improvement.
• Customer Focus: The company strives to exceed customer expectations through timely delivery and superior product performance.
• Innovation and Technology: Investing in R&D to foster innovation, the company has allocated around 5% of its annual revenue towards research initiatives.
• Sustainability: The mission includes a commitment to sustainable practices in production and sourcing.

Financial Overview

As per the latest financial statements, Supreme Petrochem reported total revenues of approximately INR 1,155 crore for the fiscal year 2022, reflecting a growth of 10% compared to the previous fiscal year. The EBITDA stood at INR 180 crore, yielding a margin of 15.6%.

Net profit for the same period was approximately INR 95 crore, representing a net profit margin of 8.2%. The return on equity (ROE) was calculated at 12.5%.

Market Position

Supreme Petrochem holds a significant position in the Indian petrochemicals market. It is among the top suppliers in the expandable polystyrene segment, catering to diverse industries such as packaging, construction, and consumer products. The market share in the polystyrene segment is estimated at around 20%.

Recent Developments

In 2023, the company announced plans to expand its production capacity by an additional 100,000 MT, with an estimated investment of INR 150 crore. This expansion is aimed at meeting the rising demand in the domestic and international markets.

Competitive Landscape

The mission of Supreme Petrochem Limited encapsulates a holistic approach toward maintaining leadership in the petrochemical industry while ensuring sustainable and responsible growth. The company's commitment to quality, innovation, and sustainability underpins its strategic objectives and long-term vision.

How Supreme Petrochem Limited Works

Supreme Petrochem Limited is a key player in the petrochemical sector, primarily engaged in the manufacturing of polystyrene and various other petrochemical products. The company operates a modern manufacturing facility located in Maharashtra, India, with a capacity to produce around 100,000 MT of polystyrene annually.

In fiscal year 2022-2023, Supreme Petrochem reported a revenue of approximately INR 1,153 Crores, showing growth from the previous fiscal year. The company’s EBITDA for the same period was around INR 170 Crores, leading to a net profit of around INR 83 Crores, reflecting an increase in profitability. The net profit margin for the year stood at approximately 7.2%.

Supreme Petrochem's product portfolio includes various grades of polystyrene such as General Purpose Polystyrene (GPPS), High Impact Polystyrene (HIPS), and Expandable Polystyrene (EPS). These products have applications across several industries including packaging, consumer goods, and construction.

The company also has a significant focus on sustainability and has invested in technology to enhance the efficiency of its manufacturing processes. In 2022, Supreme Petrochem launched a project aimed at reducing its carbon footprint by approximately 20% through energy-efficient practices.

Supreme Petrochem is strategically positioned within the market, leveraging its extensive distribution network to maintain a competitive advantage. The company distributes its products through a network of dealers and distributors across India and internationally.

Additionally, Supreme Petrochem benefits from various government policies aimed at boosting the manufacturing sector in India, such as the Production-Linked Incentive (PLI) scheme. This not only enhances the company’s growth prospects but also positions it favorably against global competitors.

As of September 2023, the stock price of Supreme Petrochem Limited was approximately INR 228, with a market capitalization of around INR 1,500 Crores. The stock has shown a year-to-date return of approximately 15%.

Overall, Supreme Petrochem Limited employs a blend of operational efficiency and strategic market positioning to optimize its performance in the highly competitive petrochemical industry. The company's focus on sustainability and product innovation further solidifies its standing as a leader in the sector.

How Supreme Petrochem Limited Makes Money

Supreme Petrochem Limited, a prominent player in the petrochemical industry, generates revenue primarily through the production of polystyrene and related products. The company operates in several segments, including the manufacture of expandable polystyrene (EPS) and general-purpose polystyrene (GPPS).

In the fiscal year 2022-23, Supreme Petrochem reported consolidated revenues of approximately ₹2,424 crore, reflecting a growth of around 14% year-over-year. The increase is attributed to rising demand in packaging, construction, and consumer goods sectors. The operating profit for the same period was about ₹273 crore, yielding an operating margin of approximately 11.3%.

The company benefits from a strong export segment, with exports contributing around 25% of total revenue in the last fiscal year. Key export markets include the Middle East and Southeast Asia, with EPS being a significant product in demand.

Supreme Petrochem produces various grades of polystyrene, including:

• Expandable Polystyrene (EPS)
• General Purpose Polystyrene (GPPS)
• High Impact Polystyrene (HIPS)

In terms of production capacity, as of March 2023, Supreme Petrochem had a total capacity of approximately 2,25,000 MT per annum for polystyrene and EPS combined. The integrated manufacturing facility in Maharashtra is strategically located to access major markets effectively.

The company's profitability is further bolstered by its focus on cost control and operational efficiencies. In the fiscal 2022-23, Supreme Petrochem achieved a net profit of approximately ₹130 crore, up from ₹111 crore in the previous year, demonstrating an increase of about 17%.

In addition, Supreme Petrochem has invested significantly in research and development to innovate and improve product offerings, which plays a crucial role in maintaining competitive advantage in the market. The R&D expenditure for fiscal 2022-23 was around ₹10 crore, focusing on sustainable products and applications.

The company also leverages diverse customer segments, including packaging, textiles, and construction, to stabilize revenue streams against market volatility. As a result, the company is well-positioned to capitalize on the growing demand for green and sustainable petrochemical products.