Hold Supreme Petrochem; target of Rs 790: Deven Choksey

Deven Choksey's research report on Supreme Petrochem

For Q2FY26, revenue from operations stood at INR 11,002 Mn, a decline of 26.9% YoY and 20.7% QoQ decline, significantly below expectations due to weak domestic demand and lower realizations. The decline was driven by softening styrene monomer prices (down to USD 800/ton from USD 940/ton in June 2025), subdued OEM demand for cooling appliances amid extended monsoon, and advance notification of GST rate cuts that led to deferred purchases. On an H1 basis, revenue stood at INR 24,867 Mn, down 19.2% YoY.

Outlook

We have rolled forward our valuation to Sept’27 estimates. We value Supreme Petrochem at 25.0x Sept’27 EPS, implying a target price of INR 790. Given limited upside from current levels, we downgrade the rating from “ACCUMULATE” to “HOLD”, while maintaining a constructive long-term stance supported by ABS rampup potential and diversification into higher-value segments.

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