Camlin Fine Sciences Limited (NSE: CAMLINFINE) Q3 2025 Earnings Call dated Feb. 14, 2025
Corporate Participants:
Ashish Dandekar — Chairman & Managing Director
Santosh Parab — Chief Financial Officer
Nirmal Momaya — Managing Director
Analysts:
Tushar Raghatate — Analyst
Satish kumar — Analyst
Subham Jain — Analyst
Ravi Mehta — Analyst
Raman K V — Analyst
Jatin Sangwan — Analyst
Surya Patra — Analyst
Rahul Picha — Analyst
Nissar Makaria — Analyst
Prashant Kothari — Analyst
Parthiv Shah — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q3 FY ’25 Results Conference Call of Camblin Fines Science Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on-date of this call. These statements are not guarantees of future performance and involve risks 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. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on the touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr. Ashish Tandekar, the Chairman and Managing Director. Thank you, and over to you, sir.
Ashish Dandekar — Chairman & Managing Director
Thank you. Ladies and gentlemen, welcome to this earnings call. I know you have a busy day-ahead. So without much pause, we will get into the actual workings of the call. Our CFO, Santosh Parav, will give you a brief of the highlights, following which he and our MD, Nirmal Mumaya will answer all your questions. Over to you, Santosh.
Santosh Parab — Chief Financial Officer
Thanks, Ashish, and good evening to everybody. If you seen our investor presentation we have uploaded our website and also the results. The current economic situation is slowly improving over the years, but the Chinese impact on pricing and supply still remains. But still we have done far better performance in this quarter. Our turnover has increased from INR422.97 crores to INR43349 crores, which is 2% increase, but in the current circumstances, it’s not about bad performance. Our gross margins have also increased by from 48% to 50%. Operationally EBITDA has also increased from 10% to 12%. So the business is stabilizing. Of course, we have profits, but it’s an improving trend. We had some other income on foreign-exchange gain last quarter, which is not there because the foreign currency has been very volatile and we had taken some hits on foreign currency in this quarter.
So we have lost. But overall, the situation is improving despite the difficult conditions at present. Briefly on the verticals, you know, our vanilin vertical has — with the sale prices increasing owing to the likely anti-dumping action on the Chinese manufacturing in the US, the prices have been improving every — almost every day I can say. We have also increased our output from last year — last quarter to this year, we had a realization of around 600 metric ton as compared to around 500 metric ton last year. The average price has also gone up. We are slowly ramping-up our production in at our plant in of things are — we will be reaching around 70% of capacity utilization from — by this year end and based on the market scenario and the pricing, we will slowly ramp it up to 100% capacity utilization.
Another vertical which has performed very well is blends. We have done extremely good performance in American continent. Even in India, we are improving. So it’s — it has been a 20% growth vertical for now almost two to three years and it is performing. All other verticals are also performing. As you know, we just completed the right issue. You know that we had an overwhelming response to that issue. We just last week completed the issues, the monies were received. We have in December, we had taken some entity for easing out the liquidity that NCD we have repaid yesterday itself along with interest. So the debt almost remains to the same level as it was in September. So the things are good. I think we’ll keep on improving the economies over in the world stabilize and the Indian situation also improves.
Thank you very much. You can ask the questions now.
Questions and Answers:
Operator
Thank you, sir. We will now begin with the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star N2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Tushar Ragat from Wealth Management. Please go-ahead.
Tushar Raghatate
Yeah, good afternoon, sir. Thank you for the opportunity. Sir, just wanted to know the, you guided 75% utilization for FY ’26. Firstly, do you hold that guidance? And second, sir, in terms of realization, how do you see that the increased margin to adding the company-level margin going-forward?
Santosh Parab
Didn’t really understand the question, but I with the thing that you are saying that capacity utilization or 35% will go to higher percent by this quarter-end. Was that the question?
Tushar Raghatate
Sir, like in the last call, your guided for 75% utilization of your plant for FY ’26.
Ashish Dandekar
FY. Yeah, that’s right. That guidance remains.
Tushar Raghatate
Got it, sir. Sir, so like in terms of improving the realization for FY ’26, I’m asking. Do you see the margin to improve now sequentially and Y-o-Y going forward?
Ashish Dandekar
Yeah, there would be some improvement. Very difficult to predict where the prices would ultimately go to, but we are seeing some improvement as compared to last few months, there has been some improvement in pricing.
Tushar Raghatate
Got it, sir. And sir, like considering the current capacity, what sort of peak revenue potential do we hold
Ashish Dandekar
For FY ’26?
Tushar Raghatate
So considering, yes, I’m not asking for FY ’26, just the current capacity which we have. So the peak revenue potential of that capacity is.
Ashish Dandekar
So the revenue for vanilin is 6,000 tons, so between $60 million to $70 million, so that’s about INR600 crores.
Tushar Raghatate
Sir, asking for company-level actually.
Ashish Dandekar
Company-level. Okay, okay, okay. Company-level with the current capacities that we have, it’s between depending on pricing between 2,500 to 2,800.
Tushar Raghatate
Got it.
Ashish Dandekar
And the blend business is — can be — can be expanded even further without much capacity constraints.
Tushar Raghatate
Got it, sir. And sirly, you’ve been doing very well in the blend business, sir, going-forward, how do you see the future of the blend like in terms of percentage contribution of the sales?
Ashish Dandekar
Yes, the blends business will continue to grow. I think we’ve been growing the business at in excess of 15% to 20% and that will continue to grow at that level, at least for the next few years.
Tushar Raghatate
Got it, sir. We’ll get back-in the queue. Thank you.
Operator
Thank you. The next question comes from the line of Satish Kumar from Incred Research. Please go-ahead.
Satish kumar
Good evening, sir. I just wanted to know what has been our fixed cost in European operations this quarter?
Ashish Dandekar
So our costs have been roughly about INR16 crores.
Satish kumar
And sir, as you guided last-time around that from Q1, this cost will not be there from Q1 FY ’26.
Ashish Dandekar
From Q1 FY ’26, it will reduce considerably. We have some material lying there in the tanks intermediate materials which we have to evacuate . Once that is done, the costs will get rationalized. So yes, it will get rationalized considerably.
Satish kumar
Okay. And sir, you the CFO, Mr was saying that prices are recovering on day-to-day basis. So what is the current prices of right now?
Ashish Dandekar
No, so in different markets, it’s a different kind of pricing because some markets like US, there is an anti-dumping duty, which has been levered. In Europe, there’s a proposed anti-dumping duty. So the prices are improving in those markets. The other markets, the prices are also slightly improving, but you know, it’s market-specific, the pricing.
Satish kumar
Yeah. So I was asking about US.
Ashish Dandekar
So US is, of course not — our entire business is not in the US, it’s only a part of our businesses to the US and the prices are in around $12, $13 range.
Satish kumar
Okay. Thank you, sir. Thanks, sir.
Operator
Thank you. The next question comes from the line of Subham Jain from NV Alpha Funds. Please go-ahead.
Subham Jain
Thank you for taking my question. My first question was on. What is the total loss that we’re still making in the Catacol plus vanilin sort of combined entity at a quarter level?
Ashish Dandekar
No, we don’t make that calculation.
Subham Jain
Okay. And so at what levels of utilization will the plus sort of breakeven just for us to understand?
Ashish Dandekar
Yeah, I think at about 70% of utilization, and menline should breakeven.
Subham Jain
Got it. So by next year, we should see a breakeven over there happening, assuming we get to the 75% utilization in FY ’26.
Ashish Dandekar
Right, that’s right.
Subham Jain
Understood. My second question was on the blends business. I just wanted to understand a little more on what are the raw materials that are used in this business? Are they largely captively consumed from the HQ part of our chemistry or do we take raw materials from other sort of companies as well.
Ashish Dandekar
Yeah. So it’s a — there are several raw materials, which we buy also from other — from outside. Our own would probably be about 30% of the purchases would be our own raw materials, 70% would be from third-parties.
Subham Jain
Got it. And this 70% is what kind of product? Is it the same BHA, BHT kind of selling.
Ashish Dandekar
So BHA, BHP and is produced by us. The other products which are — which we don’t produce are the ones which we buy. So there are some antioxidants. There are many, many organic acids. There are like more than 30 different items that come under that.
Subham Jain
Got it. And what is leading to this growth in the blends business for us? What geographies are sort of helping us build this business? And have we cracked new customers? Is that why we’re seeing this 20% kind of growth and we believe that this can go at 15%, 20% for us?
Ashish Dandekar
Yes. So it’s basically customer acquisition in all the regions. We are — we’re growing all regions at about 15% to 20% with new customer acquisitions. So that the — it’s quite uniform in the sense, all markets are growing at that level.
Subham Jain
Okay. Got it. My last question was on the interest cost. It’s gone up quarter-on-quarter as well. So what’s led to this interest cost increase?
Ashish Dandekar
The interest cost one. I didn’t get the question. Interest cost has gone up from quarter-to-quarter.
Santosh Parab
So we had borrowed INR100 crores, that is one thing we a lot of almost all of our long-term borrowings are in foreign currency dollars.
Subham Jain
Got it.
Santosh Parab
And as you know, the dollar is going up. So we have disclosed that in our UFR also that the finance cost includes foreign-exchange on the long-term debt. So across almost in all geographies, is the dollar has appreciated, the local currencies are depreciated by several percentile points and that’s what is weighing down on our balance sheet. Largely this is unrealized. So any improvement in the appreciation in rupee or the local currencies, this will come back. As far as average rate of interest is concerned, it has been in the range of 9.510 for the consolidated balance sheet.
Subham Jain
Got it. If you could just quantify the impact of the currency translation and the interest cost increase in this quarter.
Santosh Parab
You can see it in our Europe, there is a note where we have separately shown what is the foreign-exchange included in the finance cost.
Subham Jain
Okay. That will take a lot. Thank you. Thanks so much.
Operator
Thank you. A reminder to all participants, you may press star and one to ask a question. The next question comes from the line of Ravi Mehta from Deep Financials. Please go-ahead.
Ravi Mehta
Yeah, hi. Thanks for this call. My question was on. So I heard in the opening remark that probably we sold 600 tonnes of vanolin. And when I look at the top-line, so that gives me an average $11 realization that we made in Q3. So wanted to understand how it has moved from October to December gradually and where-is it now?
Ashish Dandekar
No, I don’t think the price has moved to $11 in this quarter. The average is lower than that. And the prices have actually started going up since December when the anti-dumping duty was expected. But really speaking in January, it was levied in the US so we saw the pricing started to improve from there on.
Ravi Mehta
Okay. Okay. And even in EU — Europe also the prices are tracking closer to the US market prices or is it very
Ashish Dandekar
Not the same as US market because the anti-dumping duty is proposed, it’s not yet levy, but it is — the pricing there is, of course, a little higher than what it is in other markets.
Ravi Mehta
Okay. And how much of business when we talk of 70% utilization, what kind of market splits, region splits we are trying to build as a business plan in terms of US, Europe and other markets?
Ashish Dandekar
So I think a third is — one-third US, one-third, Europe and one-third rest of the world.
Ravi Mehta
Okay. And with this anti-dumping, are you seeing dumping in other markets like Asian markets and all because that usually happens that China would try and divert the material elsewhere?
Ashish Dandekar
But I think in the other markets, they generally have almost 90% of market-share. So they can be further dumping by them because they already have large market shares.
Ravi Mehta
Okay, sure.
Ashish Dandekar
So we don’t see them dumping any further. I mean, the prices are constant in those markets.
Ravi Mehta
Okay, okay. And Q4 is basically will have a better pricing compared to the Q3 what we are seeing here is
Ashish Dandekar
— basically will be some improvement, yes.
Ravi Mehta
Okay. And just one clarification. I think you probably answered it to an earlier participant that at 70% utilization, it will kind of breakeven. I think that was meant for the categor losses, not for Van Categor losses.
Ashish Dandekar
The whole categor chain will be above.
Ravi Mehta
Okay. But itself will be profitable maybe at much lower utilization, right?
Ashish Dandekar
Yes, correct. That’s right.
Ravi Mehta
Yeah. Like any ballpark, like 25% or something?
Ashish Dandekar
No, Valin breakeven, I mean on a full-cost basis, would probably be at about 40% utilization.
Ravi Mehta
Okay, sir. Sure, sure. Okay, cool. Yeah. Thanks. Thanks. I’ll come back. Thank you.
Operator
Thank you. The next question comes from the line of Raman K V from Sequent Investments. Please go-ahead.
Raman K V
Hello, sir, can you hear me?
Operator
Yes, please go-ahead.
Raman K V
Sir, my — I just wanted to know what is the current capacity utilization with respect to Catacol and
Santosh Parab
So plant 75% of the capacity and will be in the last quarter be working at around 85 to 90.
Raman K V
Sir, can you come again which plant?
Santosh Parab
The iPhenol plant, hydrog. Yeah. And regarding plant, I said that we will be gradually going up to 75% by the end-of-the year.
Raman K V
Okay, basically we will — the plan will breakeven by Q4.
Santosh Parab
Category was a joint product. So it is breaking even on its own at this moment of time. No,
Raman K V
Okay. And with respect to itself, what is the capacity utilization only to produce plant?
Santosh Parab
Of plant or plant
Raman K V
Or vanile plant?
Santosh Parab
As I said, we are working at around 50%, 55% and we’ll be moving to 75% by this year.
Raman K V
Okay. And sir, can you give us the average price of panelin and how the price has moved over post the imposition of this anti-dumping
Santosh Parab
I think just answer that question
Nirmal Momaya
Anti-dumping is only in the US, which is a part of the business, it’s not the only business. So that’s —
Raman K V
And can you give the average price of as of now?
Santosh Parab
10% to 2%. I mean it’s improving. It’s about 10% better than it was in the last quarter.
Raman K V
Okay. Also, sir, with respect to the — if you — the — the blend segment the specialty and ingredient value-added blend, you said you are expecting 20% growth because of customer acquisition. Apart from that, do you see any growth triggers?
Santosh Parab
So basically new customer acquisition and some of course, growth of business within the existing customers. It’s both a combination of both things.
Raman K V
Okay. Thank you, sir.
Operator
Thank you. The next question comes from the line of Jakin Sangwan from Burman Capital. Please go-ahead.
Jatin Sangwan
Thanks for taking my question. Sir, my first question is around the EBITDA. We have reported an EBITDA of INR48.8 crores. And if we add-back the forex lows of INR4.4 crores, it becomes INR53 crores. So of course, it includes the loans from Europe, China and some maybe other exceptional items. So my question is on what is the EBITDA from the continuing operations, excluding the losses from Europe, China and exceptional items,
Santosh Parab
It will be about INR70 odd crores,
Jatin Sangwan
70 odd crores.
Santosh Parab
Yeah.
Jatin Sangwan
Okay. And my second question is around vanilin. So you mentioned that at 70% capacity, we would be breakeven and categor combined. So what kind of EBITDA swing would be there in absolute amount?
Santosh Parab
I think you can expect an absolute amount difficult to say because prices are both on the raw-material side as well as selling prices are dynamic, but there can be an improvement of EBITDA margin by a couple of percent.
Jatin Sangwan
Okay. And just following-up on our vanilin part, earlier you used to say that your cost of producing vanilin used to be around $8 to $9. So is it the same or has it also increased?
Santosh Parab
No, right now it has remained the same because raw-material prices are generally stable in the last quarter.
Jatin Sangwan
Okay. And our next thing around this antidumping duty. So US has at remained the preliminary anti-dumping duty open 87% in the mid of January. So what kind of price increase have you seen and what kind of talks with clients are you having at this point?
Santosh Parab
The price increase would typically be in the US would be about 20% or so higher than it was in the last quarter. And of course, everybody now wants to look at longer-term contracts because there could be some you know, shortages in the market because of course, ultimately, we are not only going to be selling in those markets. We need to have a balanced approach to the business. So overall, the vanolin business is — we are not focused — only US-focused. So the overall the vanolin business should see an improvement of about 10%, at least 10% to 15% on pricing.
Jatin Sangwan
Okay, got it. Thank you.
Operator
Thank you. The next question comes from the line of Surya Patra from PhillipCapital. Please go-ahead.
Surya Patra
Yeah. Thanks for the opportunity, sir. Sir, first question is on the volume ramp-up in the. See, this is I believe is the contracting period for the next year and we are anyway been vocal about the kind of 70% kind of utilization for the full-year FY ’26. So have you seen any kind of a ready contract that is giving a kind of visibility for next year? And what portion of the business that we can have from the spot market so-far as Vanila is concerned, sir?
Santosh Parab
So now, in fact with the prices being little dynamic with all these different anti-dumping duty actions in different countries we have not actually signed any long-term or a yearly contract and it also so happened that some of the companies were also looking for quarterly contracts because this anti-dumping duty was expected. So everything was very uncertain. So which is a good thing for us that we’ve not — we have some contracts, but those kind of run-out in this quarter, in Q4.
From Q1 of FY ’26, there’s hardly any contracted — very small quantity is contracted and we are in conversations now to see because now there is certainty in some markets of the anti-dumping like US, you can enter into some contracts in the US. But Europe, we are not yet there with the anti-dumping duty. We don’t know the quantum that will be there and the timing will come around June to start contracting.
Surya Patra
Okay. So that means the final order, which is due in July, post that thinks the optimal pricing situation also will be seen and that is when the volume visibility will also be 100%.
Santosh Parab
Correct. Correct. It’s in what is final in Europe is expected in June, the first one. US more or less preliminally and final generally, there’s not much difference.
Surya Patra
Okay.
Santosh Parab
That is expected. But yeah, certainty is only when it is final.
Surya Patra
Sure, sir. Second question is on the Vita 4 acquisition the progress on the integration front and how is that going to benefit us in terms in our blends business. So anything on that front, if you can give some sense what is your experience so-far and what progress in the blends business of Europe that you are now witnessing in the business.
Santosh Parab
So with Vita IV after the acquisition we have made many applications for registrations in several countries and few of them have started now we started getting those registrations. So we are rolling out our launches in Mexico, in Colombia, Peru, India, US also will get launched. Brazil will get launched. So in — from in FY ’26, we see that there could be a substantial growth in the business at 4. It has opened up a new market for us in terms of the kind of product profile that they have. It’s more a farm product, which, of course is something which we didn’t have in our portfolio. So all-in all, I think in FY ’26, we will see some good movement in.
Surya Patra
It is already broken even at the bottom-line level or it is still low at
Santosh Parab
No, at bottom-line level, it is not breakeven. But on EBITDA level, it is breakeven.
Surya Patra
Okay, from the loss-making situation prior to the acquisition.
Santosh Parab
Yes, correct. So we are now at least that we are breakeven on EBITDA and I think next year we should get into above breakeven.
Surya Patra
Okay. So of — and with this, if once the turnaround of this that we will see and the integration happening properly. So can we expect an elevated growth for the blends overall guidance what we have been giving around 25% or it will be part of that story, sir. It will be part of that story.
Okay. Just last one question from my side is that, see, having a all these loss-making operations in, let’s say, China and Europe. So the remaining operation, what I find is it is an integrated fully end-to-end integrated self-life business, end-to-end integrated vanilla business and a kind of established global operation on the blends front and where we would be just catching the surface where the scope of opportunity is like quite significant. So given these three verticals that is there as a growth trigger for us, so what is the way forward that we would be having here on for, whether we will be focusing more on these three verticals and try to optimize our profitability or we will think for some incremental business opportunity and going-forward.
Santosh Parab
So going-forward, I mean, our focus area will remain in the three verticals. Clearly, blends is something which is A high focus area. Aroma is also vanulin. There are many types of vanilin and we want to get into ultimately get into all the different types of vanolin which are being offered in the market so that we are a complete solution provider in the vanilin business and we can service our customers with the entire portfolio. So the idea is to focus on other value-added HQ and Catacol products other than what we are in today. So we’ve started — we’ve launched a few new products and now we are trying to scale those up. So focus will be in where we are in these kind of businesses.
Surya Patra
Okay. Sir, do you find any challenge of flowing from this tariff-related talks which is currently, which is not clear as of yet, but still never know.
Santosh Parab
I mean that is very difficult to predict. It’s there today, tomorrow there is no tariff. I don’t know. I mean, very difficult.
Surya Patra
Okay. And what is the final gross debt level that is now we are having, sir, are we having added 100 and repaying that and now having the equity through this route?
Santosh Parab
Yes. The gross debt now is after repayment of INR100 crores is around INR600 crores.
Surya Patra
Okay. So that has been — that has been kind of a constant over last two years.
Santosh Parab
Yeah. Okay. It has come back to the normal. Yeah. Subject to only last year we had that Vita acquisition in which there was some loans. Otherwise, the date is at the same level.
Surya Patra
Sure, sir. Okay. Yeah. Thank you.
Operator
Thank you. The next question comes from the line of Saurabh Savla from Multi-Act. Please go-ahead.
Rahul Picha
Yeah, this is Rahul Picha from Multi-Act. So continuing on the debt part, so what is the debt repayment plan for FY ’26.
Santosh Parab
So we generally repay around INR45 crore to INR50 crores per annum.
Rahul Picha
Okay.
Santosh Parab
We’ll be repaying that and if you can see we have arranged for the repayments also some — we have reserved some of the right issue money for repaying the debt. Obviously, we’ll not be accelerating the debt, but we have kept them in reserve.
Rahul Picha
Okay. So by the end of next year, we expect to be around INR550 crores from INR600 crores right now.
Santosh Parab
Yeah.
Rahul Picha
Okay. And what is the capex plan for FY ’26.
Santosh Parab
The capex plan is about roughly about INR30 crores to INR35 crores.
Rahul Picha
Okay. So this will largely be maintenance capex in the
Santosh Parab
Yes, yes.
Rahul Picha
Okay. And then on the Europe plant losses, so this quarter, we had around INR16 crores of loss and you mentioned that next year that loss is going to reduce. So how much reduction do we expect?
Santosh Parab
So I think once the total wind-down happens of the activity, including evacuating all the materials, we should be bring — be able to annually bring it down to an annual cost of between INR20 crores to INR25 crores.
Rahul Picha
Okay. And so-far in the first-nine months, how much loss have we had in Europe this year so-far?
Santosh Parab
I think this year we have had a loss of about INR4 crores — INR45 crores in nine months. PBT was 45%.
Rahul Picha
Okay. So from an annualized run-rate of around INR60 crores, next year it’s expected to be around INR25 crores.
Santosh Parab
Yes. It is about INR55 crores, the loss. It will come down to
Rahul Picha
Okay. And in China, how much loss are we making right now?
Santosh Parab
China is not bleeding like, there is a loss. We are getting around INR3 crores to INR4 crores on Jan per quarter. Per quarter. Okay. Which also we should be able to reduce in the next year.
Rahul Picha
Yeah. Okay, got it. Thank you. Thank you so much.
Operator
Thank you. The next question comes from the line of Nissar Makaria from NV Alpha Fund Management. Please go-ahead.
Nissar Makaria
Sir, what are the gross margins in your blends business?
Santosh Parab
Typically, they are in the region of 30% to 35%, more towards 35% than 30%.
Nissar Makaria
And EBITDA margins are close to 20%, right?
Santosh Parab
Depending on geography, once the threshold is reached, they typically end-up at about 20%, but till that minimum number is reached, it can be anything up to 20%.
Nissar Makaria
And secondly, sir, how much working capital do you need for a blends business with an approximate annual run-rate of INR900 odd crores?
Santosh Parab
Yeah. So there, I think roughly our working capital requirements in the blends is about 100 to 110 days.
Nissar Makaria
100 to 110 days of working capital requirement in blends.
Santosh Parab
Yes.
Nissar Makaria
And that is generally inventory or receivables.
Santosh Parab
Both inventories and receivables,
Nissar Makaria
Inventory and receivables? Yeah. Okay. Okay. And sir, just to clarify, you said that the EBITDA from continuing operations today is INR70 crores,
Santosh Parab
Right.
Nissar Makaria
And that INR70 crore run-rate will be visible to us from quarter-four or quarter one of next year.
Santosh Parab
So this is the quarter three right now. What we have the INR53 crores was INR17 from discontinued businesses, that’s INR70 crores.
Nissar Makaria
Okay. But the reported is INR53, so INR70 crores EBITDA will be visible from quarter-four?
Santosh Parab
No, no, no, INR53 is the EBITDA where INR17 crores is a loss from discontinued business. So if you add that back, it becomes INR70 crore from operating business,
Nissar Makaria
Okay? That’s. So operating cash-flow today is INR70 crores. For this quarter?
Santosh Parab
No, no, no. From operating businesses, we are saying the discontinued businesses are where we are losing INR17 crores.
Nissar Makaria
That’s right. So that discontinuing business of INR17 crore loss will become negligible by which quarter.
Santosh Parab
By Q2 of FY ’26, it will become much, much smaller.
Nissar Makaria
Q2 or FY ’26.
Santosh Parab
Yeah.
Nissar Makaria
And why will it take two more quarters to sort of reduce it significantly, why it cannot be reduced overnight? Just for my understanding?
Santosh Parab
Yeah, because there are several employees and those employees have to be maintained right now because we have some intermediate materials in those plants which have to be evacuated as per law. So that should get done in the Q1. By Q1 that those materials will get evacuated. And then we can rationalize the cost.
Nissar Makaria
I understand. Okay, great. Thank you. Sorry, last question if you may. Sir, any reason why you’re not giving the loss separately?
Santosh Parab
No, it’s a combined operation with a joint product. Product. We don’t sell. If we sell-in the open-market, there is a loss. If we are producing, we will not be selling category in the market. So in this quarter, we hardly sold-in. So the question and hydrokinan and is a joint. If I stop at that level, hydrokinan chain is making enough profit to justify the carrying of.
Nissar Makaria
Yes. Okay. Okay, cool. Thank you so much.
Operator
Thank you. And a reminder to all participants, please press time one to ask a question. The next question comes from the line of Tushar Rajaty from Kamakia Wealth Management. Please go-ahead.
Tushar Raghatate
Thanks for the follow-up, sir. I just wanted to understand that post like in H2 FY ’26, what sort of incremental margin are you seeing like as all the losses will be taken out and also the will start you know, adding the margins?
Ashish Dandekar
What kind of growth. Sorry, no, what kind of growth after FY ’26?
Tushar Raghatate
No, I’m asking for H2 FY ’26, what sort of margins are you seeing like Y-o-Y H2 and asking.
Ashish Dandekar
So H2 — yeah, difficult to predict at this point of time because prices are — I mean, it’s not that we have reached any stable stage of, you know, to come to a conclusion on what that margin will be. So right now, it’s positive, it’s looking good, but let’s see where it settles down. I mean, it’s too early in the day-to give you really what that margin will look like.
Tushar Raghatate
Okay. Got it. And sir, like your North-America business is doing great. Like I just wanted to know the incremental growth will come from which country exactly and what sort of growth are you seeing for FY ’26?,
Ashish Dandekar
We are seeing about 20% growth across all the geographies. So all the geographies will grow at 20% or so.
Tushar Raghatate
Got it, sir. That was really helpful. Thank you.
Operator
Thank you. And the next question comes from the line of Jatin Sangwan from Berman Capital. Please go-ahead.
Jatin Sangwan
Sir, in earlier calls, you have guided that cost of producing vanilin will go down as you ramp-up your production. So I just wanted to ask that, let’s say, 75% Kind of utilization, what will be your cost of producing vanilin and what will the cost at 100% utilization?
Ashish Dandekar
So at 100% utilization, the cost from where we are today should come down by about 10% or so.
Jatin Sangwan
Okay. And what is our cost today? Is it $9 or $8?
Ashish Dandekar
It’s about between 8.5 and 9.
Jatin Sangwan
Okay, so then the cost would be like around less than $80 so at a price of — at a price of $11, you will be getting an EBITDA of $3 per. And then $1 positive swing would come from. Is my understanding right
Ashish Dandekar
Sorry,
Jatin Sangwan
From one dollar positive thing from category.
Ashish Dandekar
No, not one dollar it. It would probably be more like yeah, it’s actually a $1 will come from. Yeah,
Jatin Sangwan
Yeah, okay, thank you.
Operator
Thank you. The next question comes from the line of Prashant Kothari from Stock Market REIT. Please go-ahead.
Prashant Kothari
Yeah. Hello, am I audible?
Ashish Dandekar
Yes.
Prashant Kothari
Good evening, everyone. Two small questions. First, you acquired Vita for Invest MV, right, to strengthen the animal feed market presence. Has the integration progressed? How has the integration progressed and what revenue growth are we expecting from there? Second question, there are — there is a lot of scrutiny on the Mexican imports into the US. Has there been any impact on Mexico operations?
Ashish Dandekar
So on the first one, 4, yeah, the integration is complete and now focus will be in FY ’26 to grow that business by at least 20% to 25%. So — and thereafter to keep growing it at least 20% a year. On the Mexico, the tariff on Mexico, will — we do supply some material into the US from Mexico. So in the event the tariff is applied, we’ll have to look at alternative market to produce it alternate in alternate countries and then supply. But at this point of time, we don’t see that a tariff likely, which has been suspended for a month, but seems like it’s being negotiated. So should settle down.
Prashant Kothari
Okay. Thank you.
Operator
Thank you. The next question comes from the line of Raman Kevi from Sequent Investments. Please go-ahead.
Raman K V
Hello, sir. Thank you for the follow-up. Sir, we raised a INR224 crores via rights. Can you tell where we will use this fund?
Santosh Parab
So we have given the details in our object to the right issue, but INR100 crores we have used for repaying the LCD, which we borrowed in the last quarter. So we are reserving around INR68 crores for debt repayment and for the general corporate purpose, INR56 crores.
Raman K V
And sir, with respect to the additional INR70 crore — INR17 crores loss from discontinued operations. Did we sell the European facility or I’m not understanding that particular part. Can you just…
Santosh Parab
So we have impaired the asset the European factory in the last quarter and that factory was shut-down because of economic reason for last two years. We are — we may not sell it, we may keep it mobile. We are evacuating all the material which is lying in the system and that’s why the cash burn is there because by Italian law, if any hazardous chemical or any kind of chemical is in the factory, you have to maintain that factory. With security, people utilities, maintenance and everything.
So we have to do. We have — and it’s not an easy process to pull out the raw-material in the plant. So it’s taking time. We have to also get clearance from the local authority because the mattern is live for two years. So we have to see the what kind of chemical composition is there and then. So that’s why it will take time. So we are expecting it to sell it off or take the necessary action by end of FY ’26 — FY — Q1 ’26 next year.
Raman K V
Okay. Thank you, sir.
Operator
Thank you. The next question comes from the line of Shah from TS Builders Private Limited. Please go-ahead.
Parthiv Shah
Thank you very much, sir, for taking my question. I just wanted to understand the trend for the blends business. So in the blends business, is we are aware, there are various types of blends like polymer blends, dairy blends, blended fibers, biofuel blend. I just want to get a sense which particular segment we are targeting because I’m hearing that the dairy blend will have one of the highest-growth because of the health consciousness nature of the customer. So where are we targeting as a company?
Ashish Dandekar
So our focus area is of course human food. It’s one of our main target areas. Then there is feed, animal feed which goes into whether it’s poultry, dairy or swine or feed. So it’s again with all species, including dog, cat, dog food, cat food. So we make ingredients that the blends go into these kind of fleet products.
Parthiv Shah
And sir, what I see is that generally the global trend for the various blend growth is anywhere between like 4% to 5% on a component basis, right up to 2030 32% is the projected market. And for the next few years, we are talking of growth of almost 20%. What brings us this confidence? And what are we doing to improve the price-mix and the product mix in our trends business versus a lot of global peers like say somebody like Super Blend or Tool Blend protein or JW nutritional etc
Ashish Dandekar
So I mean of course it’s a very technical business. Blend is a business which requires a lot of technical service, technical understanding and these teams which understand the function of all the ingredients that we supply into that market. And the product mix, of course, is always a question of competitiveness versus competition in different geographies, different markets require different products and competitiveness. So essentially, we’ve been growing this business for the last three, four or five years at that rate and we have enough visibility from — you know from our people who are in the market that to grow at 20% is in the next year is very likely.
Parthiv Shah
Okay. And sir, if I understand the rated capacity for our at Bahej is 6,000 tonnes per annum, right?
Ashish Dandekar
Yes.
Parthiv Shah
What we can do to debottleneck that capacity and what is the maximum we can go to?
Ashish Dandekar
The maximum we can go to is about 7,000 tons or so from that capacity, which will require debottlenecking. But yeah, that at some point of time, we’ll see.
Parthiv Shah
But next year, you are targeting not more than 75% capacity utilization. Only in FY ’27, you’re talking of, say, 100%.
Ashish Dandekar
Yes.
Parthiv Shah
Okay. And sir, just want to understand the additional EBITDA per KG in terms of vanilin or methyl vanilin. And if I’m not wrong, just wanted to recheck that in the past, we did face some sort of contamination issue. All of that is now salt and what sort of products we are targeting more downstream in?
Ashish Dandekar
In, no, we are — we are looking at no downstream products on that basically we are producers of the vanilin, vanilin, that’s, it’s i and we will get into the natural vanilins also over a period of time to complete the basket of products in the portfolio.
Parthiv Shah
Okay. And sir, what is the additional benefit you get by selling products like methylin versus normal?
Ashish Dandekar
No, these are — that’s the synthetic vinylin is called methyle and and the natural vinulins are of course very, very much more expensive.
Santosh Parab
What generally call is metal vanil
Parthiv Shah
Last question is regarding the China dumping. So along with the CBD, probably I think sometime in June and July, we are expecting the ADD to come from US, right? And over and above that, if I’m not wrong, whatever the tariffs that the new President has put, that will be over and above all these ADD related duties?
Ashish Dandekar
Yeah, sir.
Parthiv Shah
So would it be safe to pencil in, you know if at all China, despite its cost disruption were to dump again at these rates, it will be not less than $14, $15 or would it be more?
Ashish Dandekar
Yeah, we probably little more than that.
Parthiv Shah
So that should eventually help us to increase our share of business In US and Europe.
Ashish Dandekar
Yes.
Parthiv Shah
Okay. Thank you very much, sir. All the best.
Operator
Thank you. Ladies and gentlemen, that brings us to the end-of-the question-and-answer session. I would now like to hand the conference over to the management for the closing comments.
Ashish Dandekar
Thank you. Ladies and gentlemen, thank you for your time and interest. And until the next time that we interact, good evening. Thank you.
Operator
Thank you, sir. On behalf of Fine Sir Sciences Limited, that concludes this conference. You may now disconnect your lines.