CLSA Maintains ‘Outperform’ on IVL as Turnaround Gains Momentum

CLSA Securities forecasts Indorama Ventures Public Company Limited (SET: IVL) will rebound strongly in 2Q26 with a net profit of Bt6.1 billion (EPS Bt1.09), a sharp turnaround after five consecutive quarters of losses. The improved performance is attributed to healthy spreads and higher sales volumes in CPET, Indovinya, and the packaging division. Driven by war-induced supply constraints, CPET spreads in Asia surged to US$279/ton in 2Q26 from US$176/ton the previous quarter, reaching their highest level since 3Q22. Despite experiencing an Asia feedstock shortage, IVL successfully sourced materials and passed higher costs onto customers. The company’s sales volume is set to rise to 3.4 million tons, up from 3.2 million tons in 1Q26. Indovinya, after being impacted by weak crop and solvent demand in 1Q26, saw demand rebounding quickly during 2Q26 as buyers rushed to secure stock, which doubled EBITDA quarter-on-quarter to Bt3.4 billion. CLSA also expects the packaging segment to improve, supported by restocking for major global events such as the World Cup 2026 and hot weather conditions from El Niño. Although CLSA expects CPET spreads to soften in 3Q26, driven by falling oil prices and lower PET pricing in July, spread volatility is likely to persist due to continued Middle East tensions. However, a balanced supply/demand outlook should prevent spreads from slipping to loss-making territory. IVL aims to use its improved earnings to deleverage, targeting net debt/EBITDA of 4.7x in 2026, down from 7.4x in 1Q26. Initiatives include divesting closed-assets in Canada, Rotterdam, and Australia, which could bring in around US$200 million, and restructuring the fibre business. Despite these positive drivers, IVL’s share price has underperformed petrochemical peers since end-1Q26, falling 6% versus a range of -3% to +22% for the sector. CLSA maintains an OUTPERFORM rating with a Bt28.00 target price, citing potential for further upside as market conditions stabilize.