Camlin Fine Sciences Limited (NSE: CAMLINFINE) Q2 2025 Earnings Call dated Nov. 11, 2024
Corporate Participants:
Ashish Dandekar — Chairman & Managing Director
Santosh Parab — Chief Financial Officer
Nirmal Momaya — Managing Director
Analysts:
Kaustav Bubna — Analyst
Jatin Sangwan — Analyst
Ajit Darda — Analyst
Abbas — Analyst
Rehan Laljee — Analyst
Surya Narayan Patra — Analyst
Rohit Sinha — Analyst
Sani Vishe — Analyst
Nitin Gandhi — Analyst
Rohan Advant — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Camlin Fine Sciences Limited Q2 and H1 FY ’25 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on beliefs, opinions, and expectation of the company as on the date of this call. These statements are not the guarantees of future performance and involve risk and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Ashish Dandekar, Chairman and Managing Director. Thank you and over to you, sir.
Ashish Dandekar — Chairman & Managing Director
Thank you. Good evening, ladies and gentlemen, and welcome to our earnings call. I know your time is precious so let us get on with the proceedings. With me is Santosh Parab, CFO; and Nirmal Momaya, Managing Director. Santosh will take you through the quarter’s performance and issues and then Nirmal Momaya will be there to answer all your questions.
So without wasting any more time, I’ll hand this over to Santosh.
Santosh Parab — Chief Financial Officer
Thanks, Ashish. Good afternoon. Let me directly dive into the company’s performance. Company has increased its revenue to INR422 crores, which is 6.9% higher than that of last quarter. The growth is largely fueled by the increase in Aroma products and our sustained growth in Blends. Gross margins have improved to 48.2% mainly on better performance of Aroma, which unwinds us from catechol issues. Margins in Blends have been resolute with sustained growth. This has obviously reflected in our operational EBITDA, which has now crossed double digit and is at 10.2%, up by around 305 basis points quarter-on-quarter and 242 basis points with the corresponding quarter. As you know, crude prices, supply chain costs coupled with this volatile foreign exchange movements will have some impact and we are watching it very cautiously.
Revenue from Performance Chemicals have been muted and will remain muted due to the pricing headwinds. As I said earlier, catechol unwinding is the most important priority to us and we are looking at other catechol downstream as well. Aroma products have clocked a revenue of around INR45 crores as compared to only INR13 crores in last quarter. The anti-dumping action on Chinese manufacturer war by U.S. and Europe would augur well as Aroma business once it is levied. As you are aware, our diphenol facility in CFS Europe was temporarily shutdown since August 2023. The current economic situation does neither seem to be ideal for repurposing the facility for the proposed MEHQ, guaiacol nor for restart of diphenol manufacturing. The management of CFS Europe has decided to prolong the shutdown of diphenol facility and concentrate on blending and other business in Europe.
Hence, the company has decided to impair the cash generating unit of diphenol facility located at CFS Europe. The total net impact there was of INR116 crores on the consolidated results for this quarter. Similarly, the economic conditions are extremely challenging in China whereby it seems that the repurposing of our facility in China for manufacturing heliotropin would also take much more time than what was expected earlier. Even the current sentiment with respect to Chinese manufactured product is not very exciting globally. Company has hence after the review of the current situation during the quarter has impaired the entire business of CFS Wanglong and we have recognized around INR30 crores of impairment. Of course both these things have a telling impact on standalone financial results also. Though consolidated results are on the group level, there were intercompany outstandings have been impaired in the standalone as well.
Along with other some exceptional write-off and recognition, the total impact on the financial results of these exceptional items was around INR151 crores. Profit before exceptional items was positive INR8.73 crores as compared to loss of INR23.48 crores in the last quarter. In the given circumstances, it is indeed remarkable improvement. Liquidity situation of the company remains a challenge and working capital management is very high up on our agenda. As you are aware, the management is working on launching a rights issue in the near — very near future to address these issues. We would again reiterate our commitment to stabilize the performance revenue and consequently, margin. The economic queues are promising, but they seem to be skewed towards last part of this financial year.
I’ll now hand back the proceedings to the conductor to open the floor for question-and-answer session. Thank you.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] First question is from the line of Kaustav Bubna from BMSPL Capital. Please go ahead.
Kaustav Bubna
Yeah, hi. Thank you for taking my questions. I had a couple. So the first one is Trump has stated in his previous interviews that China is dumping products into the U.S. from Mexico. He has stated that he is going to increase scrutiny and maybe tariffs for goods coming into U.S. from Mexico. What could be the possible impact of this action on Camlin Fine Sciences as the company has a manufacturing facility in Mexico? What chemicals are sold out of the Mexican plant in North America and how much sales does North America contribute to the Mexico plant?
Nirmal Momaya
So, basically Mexico anti-dumping duty is for — what Trump has said is essentially — in fact the administration — it’s not the President who are saying it. It’s the administration who is saying if there is any bypassing of regulations under the NAFTA agreement, they will levy anti-dumping duties. So as long as there is value addition, which is genuine and which is made not out of Japanese investment — I’m sorry Chinese investment or Chinese origin products, I think we should be okay. Our first half business, to answer your second part of the question, from Mexico to U.S. that’s just blending, which can always be done in U.S. itself if there is any action taken on Mexico, is about INR63 crores.
Kaustav Bubna
Okay. Great. And my second question was on your debt levels. Could you — I mean this kind of — these debt levels are slightly discomforting. So, could you give a strategy on debt reduction or at least the way you perceive your current debt levels? That’s my last question.
Santosh Parab
So first of all, debt level on gross level has been high. There’s no question about this. We have a debt level of around INR750 crores on a gross level. It’s pretty high, we know that. Obviously we don’t have any immediate plans to reduce this debt level because once we have to stabilize the business, put all the business in line, and then we’ll think about it. We are looking at it that we should not add the debt level further. Our net debt level is around INR650 crores and gross is INR741 crores across the company. And our short-term borrowing related to working capital is around INR300-odd crores and INR440-odd crores is long-term debt, which has financed our acquisitions in Mexico as well as two big plants for diphenol and vanillin in India. Obviously we have been repaying — these loans will be repaid to the extent of around INR35 crores annually. We don’t foresee any — at this moment of time, we don’t foresee any increase in the loans, but the loans are high. But as the business grows, we don’t think we’ll increase it. But at this moment of time, there is no constructive plan to reduce it immediately.
Kaustav Bubna
Okay. Thank you so much.
Operator
Thank you. Next question is from the line of Jatin Sangwan from Burman Capital. Please go ahead.
Jatin Sangwan
Thanks for taking my question. Sir, you mentioned that you have taken the complete impairment for China. I wanted to ask question to Europe. You have of course taken an impairment of INR116 crores. So, is this the complete impairment that you have taken for Europe and is the understanding that there will be no further losses from Europe in the coming quarters?
Santosh Parab
So as far as Europe is concerned, we had two CGVs. One was a diphenol facility, which has closed. We also have a blending plant. Of course it’s a very small plant of around INR10 crores, EUR1 million, which is working and we are churning revenues from them. Diphenol plant is completely closed. We have taken the entire impairment of that CGV so all the assets related to that CGV have been impaired what we have done. So, we don’t think any further impairment on that will be there because there is no CGV asset left in the financial statements with respect to diphenol facility.
Jatin Sangwan
And sir, what is the running cash cost after this impairment for Europe?
Santosh Parab
So, we do have a loan there to the extent of around INR80 crores. But we have — we would be going to the bank for restructuring those loans and we are very confident that the revenues which are generated from Blends, we will be increasing our focus on Blends, which will take care of this outstanding in Europe. At present in this year also without — this quarter also without diphenol business, we had INR18 crores of turnover in Europe. And on a yearly basis, we have been doing a blending turnover of near to INR100 crores in Europe. So this — once we concentrate more on that and increase that footprint, we are quite confident that we’ll be able to service those loans. Of course some kind of restructuring annually will be required with the banks and we approach the banks for that.
Jatin Sangwan
And sir, you mentioned that blending — revenue from Blends is INR18 crores and we have a loan of INR80 crores. So what kind of EBITDA margin do we make on this blend so that we could pay this loan of INR80 crores?
Santosh Parab
At present on a standalone basis, the Blends business is doing a 14% to 15% EBITDA margin. But diphenol business had — because we were thinking about continuing the operations by repurposing the plant, we had hold on to the people and personnel working on that. Now since we have planned to mothball or say, have a prolonged shutdown of this plant, we would be retrenching these guys and trying to reduce the bleed on account of diphenol to around INR1 crore per quarter. And that will improve our EBITDA because at present the EBITDA, which is churned by Blends, is taken over — eaten up by the cost of diphenol maintenance.
Jatin Sangwan
And sir, if I just got it right, earlier the loss in Europe used to be around INR15 crores per quarter. You are mentioning that that will reduce to like INR1 crores per quarter?
Santosh Parab
So the cost, which we are incurring of around INR15 crores to INR16 crores on diphenol maintenance and people and other costs will reduce it to INR1 crore per quarter.
Jatin Sangwan
Got it. Sir, my second question is around vanillin. So of course I mean ADD investigation is going on in Chinese suppliers both from European and U.S. authorities, so what type of demand and client requests have you seen and what kind of utilization targets are you guiding for FY ’25?
Nirmal Momaya
Basically we are seeing very good traction from both U.S. and Europe. Of course the capacity utilization currently we are at about 40%, which by end of FY ’25 we should be hitting closer to — on a run rate basis closer to 55% or so. The idea is by FY ’26, we should be at at least 75% capacity utilization and following years to take it up to 100%.
Jatin Sangwan
Got it. And sir, has there been any improvement in the pricing for vanillin?
Nirmal Momaya
Yes, there has been a slight improvement. Yeah.
Jatin Sangwan
How much, if you could quantify?
Santosh Parab
We didn’t get your question.
Jatin Sangwan
Yes, sir. How much improvement has been there and what kind of EBITDA margin are we currently making on vanillin?
Nirmal Momaya
So we’ve improved the pricing by about $1 or so per kilo.
Jatin Sangwan
Okay. And what kind of EBITDA margin we are currently at?
Nirmal Momaya
No, we have not worked out the EBITDA margin separately because it all comes under one roof. We don’t do it segmentally.
Santosh Parab
But selling vanillin also covers us from the bleed that is from catechol. So once we value-add catechol, we incur INR100 more on catechol when we value-add it to vanillin.
Jatin Sangwan
And sir, if you could just help me understand how much is the per kilo swing because you are also selling catechol — you’re not selling catechol and you’re selling vanillin so how much is the per kilo swing due to this?
Santosh Parab
Per kilo swing on revenues? So catechol is $1 sales-wise.
Jatin Sangwan
No, no, as the EBITDA-wise? Earlier, you used to mention that catechol used to incur low so $1 to $2 per EBITDA?
Santosh Parab
So at the capacity level of 35% to 40%, once we scale up the plant to 100%, we will be having a 15% to 20% EBITDA on the sale price.
Jatin Sangwan
And sir, can I ask another question or should I come back in the queue?
Santosh Parab
Whatever you can ask.
Jatin Sangwan
Okay, sure. Thank you, sir. Sir, I was observing that we are growing Blends at a very fast pace as compared to other businesses especially in North America. That is growing very fast. It has close to become from INR16 crores two years back to like INR80 crores. So what is driving the strong growth in North America? And of course on the broader part of the Blends business, what kind of revenue are we targeting for Blends?
Nirmal
Nirmal Momaya
We are looking at growing the Blends business by about 20% this year over last year and I think we are on track for that. And the business in North America is — the focus areas are our Animal Nutrition business, which includes pet food.
Jatin Sangwan
Okay. Got it. Thank you.
Operator
Thank you. [Operator Instructions]. Next question is from the line of Ajit Darda from Nirzar Securities. Please go ahead.
Ajit Darda
Hi, sir. Good evening. Am I audible, sir?
Ashish Dandekar
Yes.
Ajit Darda
Sir, my first question is regarding Lockheed Martin. Sir, any update on that order, sir?
Nirmal Momaya
No. Like we mentioned in the last call that we supplied them for the first commercial lot, that battery of theirs will get commercialized by end of the year — commissioned by end of the year, early next year. And thereafter, the next steps will be looked at.
Ajit Darda
Okay. And sir, second question is on China. I just wanted to have some clarification. Previously we used to say that we will — we are trying to make heliotropin there. So are we going to do it or the plant is completely shut going forward? I mean it won’t be reused.
Nirmal Momaya
So the heliotropin, what we have done is we had a relook at the heliotropin project out of China because of all these anti-dumping actions being taken by U.S. and Europe. So at the appropriate time we will be setting up the capacity in India for heliotropin because that is a much safer route for us keeping in mind all these actions that are going on.
Ajit Darda
Okay. So we won’t be doing any business in China, manufacturing business, right?
Nirmal Momaya
Yeah. At this point, no, nothing.
Ajit Darda
Okay. And sir, one question is on other income, sir. Can you just break down other income of this quarter, which is INR12 crores and what will be run rate for the other income going forward? Is it one-time or what?
Santosh Parab
Other income cannot be really estimated. In this quarter, we had other income of…
Ajit Darda
Consolidated level, we have INR12 crores, right?
Santosh Parab
INR12 crores. So the breakup of that was some foreign exchange gain, which we had during the year — during the quarter.
Ajit Darda
Run rate would be INR1 crore only, right?
Santosh Parab
Yes. So generally the estimated other income is around INR1 crores, INR1.5 crores on a quarterly basis or annually.
Ajit Darda
Okay. And sir, my last question, if you allow, is on this business — I mean diphenol business. Just wanted to know how much loss going forward I mean at EBITDA level, from that business will come to our business? Just wanted to confirm that one.
Santosh Parab
I explained that we have a bleed because we have been maintaining that plant and running the plant, we are carrying people around INR15 crores. We are planning to bring down to INR1 crores within two quarters by laying off the people and other things. So, we’ll be reducing the bleed from INR15 crores on diphenol to INR1 crore.
Ajit Darda
Okay. So the cost will be reduced by INR14 crores, right?
Santosh Parab
Yeah, but it will take two quarters.
Ajit Darda
Okay. Understood, sir. Thank you so much and all the best for the future.
Operator
Thank you. Next question is from the line of Abbas from InCred. Please go ahead.
Abbas
Hi, sir. Sir, what would be EBITDA gain if we write off the assets?
Santosh Parab
What would be EBITDA? We didn’t get the question.
Abbas
EBITDA gain.
Santosh Parab
EBITDA?
Abbas
EBITDA gain if we write off the assets?
Santosh Parab
I don’t think because these are all mitigated shutdown plants. So, there was a bleed from that. There was no revenue coming in last three years for China and almost a year — more than an year for Europe. So the — in fact there was a negative bleed on the blend on EBITDA. So write-off has not impacted the EBITDA this quarter.
Abbas
Okay.
Operator
Mr. Abbas, does that answer your question?
Abbas
That’s it from my side.
Operator
Thank you. Next question is from the line of Rehan Laljee from Equitree Capital. Please go-ahead.
Rehan Laljee
Hi. Thanks for taking the time out. I had couple of questions. I wanted to understand what would be the rights issue primarily towards? Has the management decided that?
Santosh Parab
Rights issue what?
Rehan Laljee
I wanted to understand what would be the right issues towards? Like what will be fundraising for? Like what are we — is there — has the management planned out what the rights issue would be for?
Santosh Parab
Yes, we have planned out. In fact the rights issue has been for the — we have done losses, we are trying to recoup and have a support for working capital.
Rehan Laljee
Okay. And what would be further write-offs that — or any impairments that the management foresees in the coming quarters?
Santosh Parab
So whatever is latency in the businesses, two big businesses, we have taken care of that. Almost done and dusted with the impairment of two large assets, which were not earning any income.
Rehan Laljee
Right. So do we foresee any further such impairments? Because I think out of the three units, one is done. Do we foresee anything on — so diphenol you mentioned, I think some previous participants also asked you that. So the INR116 crores for the CGU at diphenol is the whole amount, right, or are we expecting any further write-offs going forward?
Santosh Parab
To repeat again, we have taken care of entire CGU assets. The other unit is the blend business and you know that blend business is a very good sustained growth business.
Rehan Laljee
Right. Okay. So no other write-off are we expecting in the next two quarters at such a macro level?
Santosh Parab
At this moment of time, what the stage of business is there, obviously no because whatever the impairment to be done has been done. One cannot see — one doesn’t know how the businesses go. We feel that there will be no write-offs in the near future.
Rehan Laljee
Okay. And I think in Q1, you had given some guidance whether we would hit double-digit EBITDA margins at a sustainable level for the year. Are you revising your guidance or are you going to stick with it?
Santosh Parab
We have already hit double-digit EBITDA margin in this quarter and we feel that this should remain and…
Rehan Laljee
Do you feel these margins are sustainable?
Santosh Parab
Yes.
Rehan Laljee
Alright. Thank you so much.
Operator
Thank you. [Operator Instructions] Next question is from the line of Surya Narayan Patra from PhillipCapital India Pvt. Ltd. Please go ahead.
Surya Narayan Patra
Hello. Yeah. Thank you for the opportunity. Sir, my first question is about, let’s say, the near-term outlook. Since the external environment is not really very conducive or, let’s say, it is unpredictable at this juncture and we have operations also in Mexico and the potential — the tax implications or the tariff implications that may or may not come, that is also not very certain. So in such a situation, it is better if you can give some clarity about your verticals. So what is the kind of outlook that you are having for all your verticals, whether it is Performance Chemicals or the Specialty Ingredients or Aroma?
Nirmal Momaya
So basically, the Blends business will continue to grow. Our estimate is we should be able to grow it at 20% per year for the next couple of years. On the Aroma business, we’ve already spoken about that that in the next two years we should be able to take it up to 75% to 80% of capacity. And Performance Chemicals, also some value-added products on hydroquinone and catechol are in the pipeline, which should also give us about a 15%, 20% growth in the next financial year.
Surya Narayan Patra
This is on a like-to-like basis excluding the European business contribution?
Nirmal Momaya
Yes, yes, excluding that. It’s on the like-to-like. So Performance Chemicals for example right now is at about 13% of our business, which could — the value could grow from whatever, INR50 crores a quarter to about INR60 crores, INR62 crores a quarter.
Surya Narayan Patra
Okay. Sir, regards, let’s say, Aroma business, anything — any incremental color that you can offer like see, we have been trying for adding more sustained and contractual customers and all that in the Western world. So any contracts that we have signed and that is giving a better and sustained visibility for the business?
Nirmal Momaya
No, we’re not signing any long-term contracts because of the uncertainty on the anti-dumping as to what the quantum will be. So typically, we are quoting per quarter or maximum for half a year. So, that’s the kind of contract that we’re doing. It’s either quarterly or half yearly. We’ve have not done a long-term contract as yet.
Surya Narayan Patra
Okay. Whether those will be the scope of opportunity because again I think the contract period or the contracting cycle that is likely to come off I think in this current quarter. So from that angle also, any visibility for a long-term contract signing further?
Nirmal Momaya
I think both sides, whether it’s us or the buyers, are waiting for the anti-dumping duty to get crystallized, right? So if it is at 50%, pricing will be different. If it’s at 100%, the pricing will be different. So no, I don’t think either party wants to take a stand today till that is played out. So that’s why we are saying that right now we are getting into the quarter or half yearly supply agreements for only that period because both sides are unclear what is going to happen.
Surya Narayan Patra
So is it fair to believe, sir, since the timeline are not given by both Europe and U.S. and it is not happening very quickly also the final imposition of the tariff and the rates of the kind of tariff, that is not going to be decided even very quickly. So then — so till the time, it would be a kind of a quarterly story that we will play. And post that, is there any sense that okay, the pricing situation that’s likely to be post that?
Nirmal Momaya
No, it will also largely be defined by what the anti-dumping duty is. So again you can’t go below that price because then you can get exposed to anti-dumping if you’re pricing yourself too below that. So it’s a matter we have to see. It will only play out once this is decided. First round is end of November in the U.S. and by April — by May of next year, U.S. will finalize completely. Right now they will have interim and then the final order is by May.
Surya Narayan Patra
Okay. And regards to the Blends business, see, generally that we have seen kind of a steady progression despite the market conditions there in the Blends operations. So could you give some sense about the volume value progress in there, sir?
Nirmal Momaya
So in terms of value progression from — I think we are growing at about — like I said, we should be able to grow between 15% to 20% for this — for FY ’25 versus FY ’24. So FY ’24 was around INR700-odd crores, INR750 crores. And this year we should probably close around closer to INR1,000 crores.
Surya Narayan Patra
So is it fair to believe that Blends have not seen any pricing pressure then?
Nirmal Momaya
No, there is pricing pressure. In the sense if all raw material prices have come down, it has come down. Volume, we’ve been able to grow. So clearly with the correction in many, many chemicals, the prices have come down, which we also of course buy a lot of raw material. So we need to pass that on to the customers. So surely on the volume side, we’ve grown much more than that.
Surya Narayan Patra
Okay. And with regards to European business now so since the diphenol operation is no longer there, so it is only the kind of a Blends operation from there. And see, we have acquired Vitafor also, which is having a kind of a greater and larger presence in Europe. So what is the kind of integration scope there and what is the likely benefit that we — if possible, that we can derive out of that integration?
Nirmal Momaya
Yes. So Vitafor has a different set of products compared to — I mean mainly their portfolio is more farm products so — whereas we are more focused on the feed side. So it gives us an opportunity to address the farm market with the product portfolio that we have in Vitafor, which is proprietary. And we have some good technologies there for those products, which typically are consumed in farm. So our idea is to obviously take those products to all the markets where we have our own platforms for selling, whether through our own salespeople or through our distributors. So, that process is on now. We are onboarding it and taking registrations in many countries where we believe the markets would be conducive for us to be in.
Surya Narayan Patra
Okay. Sir, in this presentation you have mentioned that while scrapping this European unit also, there’s just some — you’re targeting that negotiated settlement with lenders. What is that we are targeting there, sir?
Nirmal Momaya
So it’s just basically we are targeting that the outstanding that we have gets stretched over a period of — a number of years as opposed to some amounts due in the next couple of years. That’s it.
Surya Narayan Patra
Okay. Just last one, sir. Because we are scrapping the entire operation of the diphenol, so the — any severance package or anything that which can further hit our financials going ahead? Any scope of that?
Santosh Parab
So, we have given a furlough. So, we have taken care of that earlier. So, we don’t expect any retrenchment. There are enough provision, we will take care of that in the books and we don’t foresee any payment for layover or something to be paid to the employees. That has been taken care. We knew and so we were — went for a furlough with the government and we have given enough notice to them. So by the end of this financial year, we can retrench them.
Surya Narayan Patra
Okay. Sure. Thank you, sir.
Operator
Thank you. Next question is from the line of Rohit Sinha from Sunidhi Securities. Please proceed.
Rohit Sinha
Yeah. Thank you for taking my question. Sorry, my line got dropped earlier so maybe my question would be repetitive. So one question on the vanillin side. I mean after commissioning our product, what kind of utilization level right now we have reached? And I hope a good contribution would be there in this quarter from vanillin as well. So, what kind of outlook we have for vanillin in terms of pricing scenario also as prices have quite corrected significantly in last one year? And is there any further scope or chances where we would be looking to expand our vanillin capacity?
Santosh Parab
At present, we did answer this. But to summarize, we are running at 40%. We are planning to scale up to — for an yearly volume of 50%. In the next one year, we will be trying to reach 100% capacity of 6,000. The prices have improved. We are now nearing $10. At present, we will first utilize what the capacity we had of 6,000. We will optimize that and then later on — at this moment of time, we don’t have any plans to enhance the vanillin capacity.
Rohit Sinha
Okay. And earlier, I think 1.5 years back when we were talking about this vanillin product, that time the prices were quite high at around $18, $20, which is now trading at around $10. What kind of — I would say what kind of demand improvement we are anticipating or what kind of outlook we have to see prices going further for vanillin to at least in the range of next $13, $14 kind of range or it would remain — do you feel it would remain in this similar $10, $11 range?
Santosh Parab
We did answer this question, but again briefly. As you know, there is an anti-dumping duty actions which have been initiated by U.S. and European authorities primarily to curtail the Chinese dumping and predatory pricing. Chinese are the guys who had reduced this price. If they are out of the market, the prices should come back. One cannot say how much. It will be certainly higher than what they are at this stage.
Rohit Sinha
Okay, okay. And on the diphenol side as we have completely closed on that facility, at our Dahej facility what utilization level we are operating and there is there further scope for expanding?
Nirmal Momaya
So basically we are operating Dahej capacity at 80% because that’s the requirement that we have for hydroquinone and catechol in our business. As our vanillin business progresses as well as our other downstream diphenol products increase, we will keep pushing up the capacity utilization.
Rohit Sinha
Okay. That’s it from my side, sir. Thank you and best of luck.
Operator
Thank you. Next question is from the line of Sani Vishe from Axis Securities. Please go ahead.
Sani Vishe
Hello. Am I audible?
Santosh Parab
Yes.
Sani Vishe
Okay. Thank you for taking my question, sir. So what I’m trying to understand is we said we have a spending revenue of around INR18 crores to INR19 crores in Europe. And I think for the whole of H1, it was somewhere around INR49 crores. So do we expect that the revenues will be — I mean this will be the run rate in Europe because now that we don’t expect anything from the impaired business?
Santosh Parab
This is at least revenue. These are Blends revenue. These are the minimum we’ll be focusing more. And as Nirmal was saying, that we’ll be focusing on other products in Blends other than in Vitafor and we expect that this will be grow — growing at a very faster rate than what it is now.
Sani Vishe
Okay. Understood. That’s it from my side. Thanks.
Operator
Thank you. Next question is from the line of Nitin Gandhi from Inoquest Advisors Private Limited. Please go ahead.
Nitin Gandhi
Yeah. Thanks for taking my question. I just take whatever we discussed. So we are expecting Blends to move from roughly INR220 crores to INR300 crores over four or five quarters, Aroma to be increased from somewhere around capacity utilization of 25% to 80% so effectively from INR40 crores, INR45 crores to INR100 crores, and hydroquinone PC 15% to 20% growth maybe to INR65 crores, INR70 crores. So same way, just confirm this understanding. And same way, if you can share something for the states. What’s your plan? And if all this materializes, I think EBITDA can comfortably shoot to at least 15%, 16%. Is my understanding correct?
Santosh Parab
Yes, the prices support this.
Nirmal Momaya
Depending on how the market plays. But yes, your topline numbers, revenues are right. The margin really is dependent on what the pricing will remain in the market. So yes.
Nitin Gandhi
And for states, can you share what’s the expected movement, which is…
Nirmal Momaya
So in states, we are more or less — I think we are at market share. So unless some new applications come, it will remain there.
Nitin Gandhi
Okay. And there isn’t any new application under plan or are there plans…
Nirmal Momaya
We are working — we keep working on many new applications. So if that happens, of course there would be some extra sales that can come.
Nitin Gandhi
Right. I think it’s good you have taken a good decision to clean-up and wish you all the best. Thank you.
Operator
Thank you. Next question is from the line of Rohan Advant from Prad Capital. Please go ahead.
Rohan Advant
Yeah. Sir, thanks for the opportunity. Sir, we have now reached an EBITDA margin of 10.2% in this quarter. And from the comments that you made regarding the Europe facility and the savings that will accrue to us, we should save about INR14 crores, INR15 crores in a couple of quarters more. So that would add another 4% kind of EBITDA. So even on a current price basis if they stay as is, once we save these costs that are due to the European operations right now, shouldn’t we add 14%, 15% EBITDA margins by Q4?
Santosh Parab
So Rohan, your calculation is correct. But as I said, the savings will happen only after two quarters because we have to retrain people and do lot of things. So at least in this year, this bleed will remain for some period of time for this two quarters. And obviously this kicks in in the next financial year.
Rohan Advant
Got it. So one, there could be some one-time costs that could come our way in the next two quarters. But once they are behind us, we should be even at current prices at 14%, 15% margin, right? At current prices?
Santosh Parab
At current prices, yes.
Nirmal Momaya
Yes.
Rohan Advant
And sir, secondly, regarding the anti-dumping duty, what are the timelines and what are the steps here on for it to see the light of day? And the current U.S. political situation, does that help us, hurt us in any way in terms of ADD being imposed?
Nirmal Momaya
Very difficult to say whether it will help or hurt. That’s really beyond our understanding. But in terms of the timeline, as the government had earlier spelled out the timelines, by November end, early December there will be the interim order and the final order is expected middle of next year, May, June of next year.
Rohan Advant
Understood. Thank you, sir, and all the best.
Operator
Thank you. [Operator Instructions] We have our next follow-up question from the line of Jatin Sangwan from Burman Capital. Please proceed.
Jatin Sangwan
Sir, based on the current visibility we have, so what kind of revenue we can do in H2 of FY ’25 and what kind of EBITDA margin can we do?
Nirmal Momaya
Revenue will probably grow from where we are on this quarter with some addition to it on our Blends and vanillin business. And EBITDA margin should probably remain where we are right now. Maybe a slight improvement if things improve.
Jatin Sangwan
Got it. And what’s the picture looking like…
Santosh Parab
Generally, Jatin, if you see, traditionally, our first quarter — and it’s around 45:55, 40:60. So looking at the current scenario, I think we will lock in around 10% more than what we are doing at this current place — current prices. And as Nirmal said that and I also said that there is some bleed from Europe happening. We will have at least almost the same EBITDA for the next two quarters.
Jatin Sangwan
Got it. And sir, how will the picture look like for FY ’26? Can we do revenue of like INR2,300 crores, INR2,400 crores or we will be below that?
Nirmal Momaya
We should be in that region.
Jatin Sangwan
And what kind of EBITDA margin are we looking because the bleed from Europe will go away?
Nirmal Momaya
Difficult to say, but it should remain in the teens.
Jatin Sangwan
Mid-teens. Can we reach mid-teens?
Nirmal Momaya
Mid-teens, difficult to say again what pricing and no. Very, very difficult to predict.
Jatin Sangwan
Okay. Got it. Thank you.
Operator
Thank you. As there are no further questions from the participants, I would now like to hand the conference over to the management for the closing comments.
Ashish Dandekar
Ladies and gentlemen, thank you very much for spending your precious time and understanding our operations and situation. We look forward to interacting with you at the end of this quarter. Until then, we wish you well for the New Year. Thank you.
Operator
[Operator Closing Remarks]