Oriental Aromatics Ltd (NSE: OAL) Q4 2025 Earnings Call dated May. 29, 2025
Corporate Participants:
Dharmil Bodani — Chairman & Managing Director
Shyamal Bodani — Executive Director
Girish Khandelwal — Chief Financial Officer,
Unidentified Speaker
Analysts:
Purvangi Jain — Analyst
Ankit Gupta — Analyst
Unidentified Participant
Manish Dhariwal — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Oriental Aromatics Limited Q4 and FY ’25 Earnings Conference Call. 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 your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Ms Jain from Valorem Advisors. Thank you, and over to you, ma’am.
Purvangi Jain — Analyst
Thank you. Good afternoon, everyone, and a warm welcome to you all. My name is Jain from Advisors. We represent the Investor Relations of Oriental Aromatics Limited. On behalf of the company, I would like to thank you all for participating in the company’s earnings conference call for the 4th-quarter and the financial year ended 2025.
Before we begin, let me mention a short cautionary statement. Some of the statements made in today’s earnings call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management’s belief as well as assumptions made by and information currently available to the management.
Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of today’s earnings call is purely to educate and bring awareness about the company’s fundamental business and Financial quarter under review. Now let me introduce you to the management participating with us in today’s earnings call and hand it over to them for their opening remarks. We have with us Mr Dharmil Bodhani, Chairman and Managing Director; Mr Sharmal Budani, Executive Director; Mr Girish Khandelwal, Chief Financial Officer; Mr Paral Satoskar, Chief Executive Officer; and Ms Kiran, Company Secretary. Without any delay, I request Mr Dharmil Budani to start with his opening remarks. Thank you, and over to you, sir.
Dharmil Bodani — Chairman & Managing Director
Thank you,. Good afternoon, ladies and gentlemen. I am Dharmil Bodani, Chairman and Managing Director of Orient Limited. It is my pleasure to welcome all of you to our FY ’25 and Q4 FY ’25 earnings call. I extend my gratitude to our valued shareholders, analysts and partners for joining us today. We have much to discuss from the global industry landscape to our company’s performance over the past year.
And I would also especially like to touch upon the broader context in which we are now operating. I would like to begin my speech by today talking about two legacy FMCG brands that have been part of the Oriental automatics portfolio for multiple decades. The names of the brands are Saraswathi Kampfor and Three Point and Beam Singh, originally registered in 1967 and 1994.
These heritage brands have remained synonymous with purity, tradition and trust for over five decades, making them among the oldest continuously operating names in India’s Puja FMCG segment. For several years, the manufacturing, sales and promotional responsibilities of these brands were franchised. In FY ’23-’24, OEL strategically internalized both brands into its direct product portfolio.
As of FY ’24, ’25, the complete management from production to-market execution is now handled exclusively by dedicated OAL teams. With the induction process now successfully completed, we are excited to represent these two powerful brand assets to our investor community. Key highlights of the two brands, pan-India presence,
Established footprint with strong market leadership across multiple regions, trusted product portfolio, both brands offer high-quality products catering to everyday spiritual and household use. Premium variant offering. Brand includes known for its superior purity and deep spiritual relevance, manufacturing backbone. Together, Saraswathi and account for over 60% of OEL’s total powder camfor production, reinforcing their scale and relevance.
Strategic moat, the synergy between our domestic brand strength and our global leadership in pharmaceutical grade creates a robust competitive moat, offering insulation from broader industry volatility. Growth platform. These legacy brands served as a national launch pad for deeper expansion into India’s fast-growing and culturally significant segment, unlocking new FMCG growth avenues. As a trusted name in millions of Indian households, Saraswathi and Three Pine not only reinforce our heritage, but also represent a strategic lever for future innovation and portfolio growth in the spiritual and traditional product segment.
With that, I now invite Sharmal Buddhani, our Executive Director to take-over and continue the speech. Thank you. Over to you,.
Shyamal Bodani — Executive Director
Thank you,. Good afternoon, everyone. Thank you for joining us for quarter-four financial year 2024 ’25’s earning call. I would like to now give you a comprehensive global overview of all industry segments that we operate in, after which I will try to highlight as Oriental Aromatics Limited, where we stand today and where we are headed as a company in the future.
Globally, the fragrance and flavor industry demonstrates resilience in FY ’25, despite facing multiple headwinds, industry reports indicate that the traditional F&F market comprising of compounded flavors and fragrance blends grew modestly. Encouragingly, fragrance application provided particularly robust, proved particularly robust worldwide. Fine fragrance perfumes continue to enjoy healthy demand as consumers return to social lives post pandemic.
And customer — consumer product fragrances used in soaps, detergent and personal care maintained their essential status. In fact, the fragrance division of major global players outperformed the other divisions in their portfolio. This trend underscores that even amid an uncertain global economy, consumers value the experience and comfort of fragrance products that provides the theme for the FMCG industry in India seems to be premiumization.
The other significant trend seems to be the emergence of rural India as a major consumer of FMCG products. Both these trends have created unique opportunities for FNF companies based out of India. Earlier in the year, many large FMCG customers globally and in India engaged in destocking, reducing their fragrance inventories, which had been built-up during prior supply-chain disruptions. This caused a short-term dip in orders to fragrance and flavor houses, especially in H1.
However, by the end-of-the year, order patterns have been normalized as clients’ inventories reached equilibrium. Overall, the fragrance and flavor industry demonstrated agility using innovation and pricing discipline to navigate cost inflation and volatility. Moving to the aroma Chemical Ingredients segment, this is the backbone of fragrances and flavor creation comprising specialty aroma chemicals, essential oils and cosmetic ingredients.
Globally, the market for aroma molecules and related ingredients also experienced modest growth in FY ’25. However, the aroma ingredients space in ’24, ’25 was not without its challenges. Inflationary pressures on some raw materials like petrochemicals, natural oils and solvents earlier in the year squeezed margins for ingredient manufacturers.
There were also pockets of oversupply in certain aroma chemicals as new production capacities came online globally, leading to competitive pricing. Despite these hurdles, the leading aroma ingredients producers maintained a focus on innovation, developing novel captive molecules and green chemistry processes and on backward integration to control costs. The result was that overall supply-and-demand stayed fairly balanced by year end.
This bodes well for ingredient makers as stable input costs combined with steady volumes can help restore reasonable profitability. In summary, the aroma ingredients industry delivered stable, if not spectacular growth over the year, focusing on productivity and value-added products to sustain its momentum.
Now let me address the Camphor and terpene-based chemicals segments, which is an important niche both globally and for our company. Camphor, along with its related terpene derivatives such as terpenyol, pine oils and other pine tree deerrived chemicals had a year of mixed fortunes internationally. On one-hand, demand remained fundamentally healthy.
Is used in a diverse end-market from pharmaceuticals, tropical balms to incense and religious devotional use. And these applications ensured baseline consumption stayed firm. Additionally, the broad pineing chemicals market, which includes products from pine resin to terpentine continues on a growth trajectory. On the other hand, price realization in FY ’25 was a concern in this segment.
FY ’24-’25 has been a unique year for the terpene-based products industry. The critical raw-material here is alpha and beta pionine. Companies operating in this space are used to cyclical pricing of alpha and beta pionine. However, this year, when the prices of alpha pine globally dropped substantially at the start of the year.
This drop was surprise — surprising as the prices corrected by multiple percentage points within a few weeks. This coupled with overcapacity in most products and subdued demand of the finished products impacted top-line as well as profitability for the first two quarters. Things have finally stabilized in terms of price and demand in the last two quarters. As a result, increased competition and supply put downward pressure on-market prices for products like synthetic camfor and terpene alcohols . Many producers, including us had to contend with compressed margins as selling price for bulk, camfor and allied chemicals eased even while raw-material costs remain relatively elevated. In short, the terpene chemical space is facing headwinds on pricing, making profitability growth more challenging. Despite these pressures, it is worth noting that our industry peers in this niche still fed reasonably well by focusing on value-added grades and efficiency. Companies with strong brands or specialized offerings in Camphor, for example, high-purity pharma grade or branded consumer formulated Camphor products managed to defend their market-share. Overall, the global backdrop for our sector in FY ’25 can be summarized as follows: Resilient demand with selective growth areas, especially in fragrances, industry-wide emphasis on managing inflation and the normalization of supply chains leading to some price adjustments. The larger players in fragrance and flavor continue to grow and invest confidently, which sets a positive tone. At the time, all industry members have had to stay agile amid geopolitical and economic uncertainties. With that, that global context in mind, now let me turn to Oriental Aromatics performance and highlights for the year. I am pleased to report that despite the challenging macro-environment, Oriental Aromatics delivered a credible performance in FY ’25 with a particularly strong positive push in the third and 4th-quarter. We pursued a strategy of quality growth, prioritizing profitability and long-term value over short-term volume pushes and this has reflected in our results. I will now review each of our divisions in detail, fragrances, and terpene chemicals and specialty aroma ingredients, as well as provide an update on our new Mahad facility. Our fragrance division had a very good year, emerging as a key growth driver for the company. This performance is especially noteworthy given the context of an Indian FMCG sector slowdown in H2, especially urban demand. How did we accomplish this? Firstly, our team succeeded in winning new business, both internationally and domestically. We expanded our put footprint with global clients securing new fragrance wins from overseas market, while also adding new Indian customers in categories like personal care, home care and air care. These new customer acquisitions contributed significantly to our growth. Secondly, we deepened our engagement with existing clients, many of whom are marquee names in the FMCG sector, resulting in increased share of wallet and higher order volumes for Oriental aromatics fragrances. Even as some large FMCG companies saw slower-growth, they continued to innovate and new product launches. And we are proud to partner with them by supplying creative fragrance solutions for those launches. Our ability to grow with our clients by servicing their new product needs and expanding into more of their product lines has been a hallmark of this year. Another crucial factor has been the broad-based — broad-basing of our customer mix. Not only did top-tier national and global clients contribute, but notably smaller and regional customers also added significant volumes. This underscores the resilience of India’s consumption story. Demand from regional players and emerging brands in India remained strong and we tapped into that by providing tailored fragrance compounds for their unique needs, such as local incense makers, boutique personal care brands. By catering to a wide spectrum of customers, we reduced dependency on any single client and opened new avenues of growth. I want to emphasize the strategic advance — advantage conferred by our backward integration in this tech segment. Oriental Aromatics is among the privileged few fragrance houses that also manufactures their own aroma ingredients. This means a generous portion of the aroma chemicals that go into our fragrance compound are produced internally at our facilities. In FY ’25, this vertical integration proved invaluable. It ensured supply, security and cost-control at a time when global supply chains were unpredictable. While other fragrance manufacturers might have faced shortage or inflated prices for certain key ingredients, we could rely on our in-house production or captive sourcing to meet our formulation needs. This not only protected our margins, but also gave us flexibility to price our fragrances competitively without compromising on quality. In essence, our fragrance creation team work hand-in-hand with our chemicals, R&D and manufacturing teams allowing us to offer clients a compelling value proposition, creative sense backed by reliable, cost-effective supply of the ingredients that make-up those. Turning now to our CAMFOR and terpene chemical division, which includes our range of Camphor products and a variety of terpene-based chemicals, FY ’25 was a year of consolidation for this business. First, we consciously adopted a strategy to preserve value in an environment of pricing pressure. As I noted earlier, the market prices for many terpene-based products were under pressure industry-wide and Oriental Aromatics was not immune to this trend. Rather than chasing unsustainable volumes at low margins, we took a calibrated approach, in some cases even reducing production volumes to focus on higher-margin sales. This deliberate strategy meant our sales volumes for Camphor terpene products were flat year-on-year and overall revenue from this division was subdued. However, it also meant that we avoided flooding the market and worsening the price decline and we protected the business from operating at uneconomical price levels. By the second-half of the year, this approach began to pay-off. As market conditions stabilized and we were able to realize better pricing on our sales. That said, there were also positive highlights in the division that I want to share. Camphor powder and formulated Camphor sales for end-consumer use remained steady, r Eflecting our strong brands and distribution. Throughout FY ’25, we sustained our leadership in the Indian Camphor market by leveraging goodwill associated with Saraswati and three pine. On the industrial and chemical side of this division, topin chemicals like topinionol, camford camphine derivatives etc will face the brunt of price erosion. However, even here, there were bright spots. In Q4 and towards year-end, we saw an uptick in order inquiries of certain terpen specialties. We also had some success in export markets for terpene chemicals, capitalizing on India’s reputation as a stable supplier when other sources were volatile. Our plant, which produces and terpene chemicals achieved improved operational efficiencies, energy conservation and yield improvements, which helped partially offsetting the lower selling prices. This process continues as a part of our CPR program. As a result, this division’s profitability began to recover in the last two quarters. In fact, I am happy to share that Q3 and Q4 FY ’25 was one of the better quarters in recent times for Camphor and terpene divisions in terms of realization, setting a hopeful tone for the new fiscal year. In summary, the Camphor divisions weathered a tough year-by holding firm on price — pricing discipline and leaning on our brand strength. We consciously traded off some top-line growth in exchange for healthier margin and stronger — and a stronger foundation. This prudence aligns with our long-term view for the business and we anticipated that as the cycle turns, Oriental Aromatics will be in well-positioned to capture the upside in campine and terpene chemicals. Next, let’s discuss our Specialty aroma ingredients division, which encompasses a wide variety of aroma chemicals and specialty molecules we manufacture for use in fragrances, flavors and other applications. This division exemplifies our legacy of chemical manufacturing expertise and includes products ranging from terpinoids to mask and sandalwood derivatives. In FY ’25, the Specialty Aroma ingredients division saw healthy demand and volume Growth, reflecting its critical role in the supply-chain of fragrances and flavors. We showed good growth in-production, sales volume of aroma chemicals throughout the year. Our customers, which include both internal captive consumption by our fragrance division and external sales to other fragrance and flavor houses needed steady supply and we ramped-up the output to meet their needs. I am proud to say that our manufacturing teams rose to the occasion running plants efficiently and increasing production without compromising on quality or safety. However, much like the global trend, our aroma ingredients business faced pressure on profitable price realization. In plainar terms, while we sold more volumes, we had to do so at prices that were often lower than the previous year for certain products. This was due to stiff competition and an oversupplied market for commodity aroma chemicals. We responded by emphasizing our specialty portfolio, focusing on niche and high-value aroma chemicals where we have efficient processes or quality advantages. This helped to some extent in protecting our profitability. Additional — additionally, our backward integration, again the synergy between making our own raw materials and using them in our own fragrances allowed us to internally consume a sizable portion of our aroma chemical output at transfer prices, effectively securing an assured margin on those. Despite margin pressures, it’s important to note that this division remains the cornerstone of our ingredient model and the key to our future growth. The capabilities we have like hydrogenation, ability to commercially manage a wide range of chemistries, our CPR program are world-class and we continue to invest and invest in them during FY ’25. We commissioned new process improvements and R&D initiatives aimed at-cost reduction. By the year end, we were early — we were — there were early signs that raw materials cost inflation was easing, which should improve the situation going-forward. In summary, the specialty Aroma ingredients division had a year of excellent operational performance, volumes up, new products introduced, but financial performance that was tempered by industry-wide pricing challenges. We view this as a timing issue. Demand is real and growing and once the supply-demand balance normalizes, the profitability will follow. Now for an update on our Mahad plant commissioning, I am delighted to share with you an important milestone achieved during the year, the commissioning of our new greenfield manufacturing facility in Mahad, Maharashtra. This state-of-art plant is dedicated to the product — production of a specialized aroma ingredient, one of our newest products, branded Evermos. We often speak about process efficiency and moving up the value chain. Evermos is a prime example of that philosophy in action. Construction and commercial trials at the Mahaj site progressed through FY ’25 and I am proud to announce that as of November 12, 2024, full commercial production commenced at this facility. Those initial shipments marked the beginning of revenue generation from this investment. Early customer feedback for Evermos has been encouraging. Our global distributors and key clients, some of whom received pre-launch samples have expressed keen interest. The Mahad plant’s commissioning is a significant driver for our company’s future growth. It adds substantial capacity and technology — technological capabilities. It also reinforces our mission to deliver complex, high-quality aroma chemicals at-scale. From a financial perspective, we have begun seeing the capitalization of this asset. And while the full top-line contribution will reflect in FY ’26 and beyond, we wanted our investors to recognize that a major growth capex has now translated into an operational asset. We remain focused on ramping-up Mahar to optimal capacity over the next few quarters. Alongside Mahad, I should also mention that our other expansion projects such as the new hydrogenation unit at Varodra commissioned in July 2024 are on-track and already contributing to already contributing by enabling new products and efficiency gains. All these investments underpin our confidence in the long-term demand for our products and they equip us to capture a larger share of the global market. Geopolitical environment in India’s strategic position, as we access — assess our performance and plan ahead, we must also maintain vigilant about the broader geopolitical and economic environment. FY ’25 and the start of FY ’26 have been characterized by a considerable global uncertainty. Geopolitical tensions from the conflict in Eastern Europe to changing trade relations in Asia continue to pose both risks and opportunities. One pertinent issue in the landscape of international tariffs and trade policies. India itself has taken a more assertive stance in ensuring fair trade terms as seen in recent WTO filings and bilateral talks. OI industry, which relies on cross-border movement of raw materials and finished goods, goods such tariffs, uncertainties requires careful navigation. We source certain ingredients globally and also export our products to many regions. So we are actively monitoring and hedging against trade policies, shifts that could impact duties or market access. We remain cognizant of near-term uncertainties. Geopol politics can be unpredictable, situations can evolve rapidly and we must be ready to adapt. We have business continuity plans and a diversified sourcing strategy to mitigate risks such as import-export bottlenecks or sudden regulatory changes. Overall, we are optimistic that the macro-environment, while complex, will offer more tailwinds than headwinds for Indian industry in the medium-term, given India’s strength standing. Looking ahead, we remain confident about Oriental Aromatics growth trajectory. The order pipeline for our fragrance division is healthy, both domestic FMGC CG clients and international buyers have provided encouraging forecast and our creative teams are now working with a number of new fragrance briefs, which we expect to translate into business. In aroma ingredients, the new capacities, our Rodra hydrogenation Mahad Evermos plant are coming on-stream at the right time to serve increasing demand and we anticipate improvement in margins as the product mix shifts towards more value-added ingredients and as pricing gradually normalizes. For and products, early signs of price stabilization and volume uptick suggest that the worst is behind us. We are poised to benefit from any rebound in this segment with our lean operations and strong brands. From a financial perspective, I would like to reiterate our commitment to profitable growth. We are maintaining our guidance on operating performance. In fact, I want to clearly state that our EBITDA guidance remains unchanged from the previous year’s level. In closing, I would like to say that FY ’25 was a year that tested many companies and Oriental Aromatics emerged stronger and wiser. We navigated a tough environment by staying true to our core strengths, innovation, Integration and prudent management. We have built a solid foundation for growth with new capacities coming online and new markets opening up. As we move into FY ’26, we do so with humility about challenges and confident in our team’s ability to deliver. I thank all our employees for their dedication and hard work. They are the force behind every achievement I discussed — I discussed today. I would also like to thank our Board for their guidance and our shareholders for your unwavering trust. Finally, I extend my gratitude to the customers and partners globally for continuing to collaborate with Oriental Aromatics in creating fragrances, flavors and ingredients that delight millions of end consumers. We are excited about the road ahead and look-forward to sharing our progress in the coming quarters. Thank you for your attention. I Will now hand it over to Mr Girish Khandelwal, our CFO, to brief you on the financial highlights.
Girish Khandelwal — Chief Financial Officer,
Over to you, Girish. Thank you very much,. Good afternoon, everyone. Let me begin by sharing our consolidated performance for the Q4 FY ’25. The operating revenues stood at INR253 crores, reflecting a 17% year-on-year growth and a 13.7% increase on quarter-on-quarter. EBITDA was reported at INR19 crores compared to INR22 crores in the previous quarter and INR20.9 crore in the corresponding quarter last year. EBITDA margins stood at 7.62% as compared to 10.15% in the previous quarter. Net profit-after-tax stood at INR1.4 crores.
Now coming to FY ’25 performance on a consolidated basis, the operating revenue was INR928 crores, making an 11% year-on-year growth. EBITDA stood at INR93.4 crore, nearly doubling from INR47 crore in FY ’24. EBITDA margins stood at 10.06%, up from 5.62% in FY ’24. Net profit-after-tax stood at INR34.3 crore, significantly up from INR9.1 crores in FY ’24 while PAT margins improved to 3.69%, reflecting a 260 basis-points year-on-year increase.
Now let me speak about our wholly-owned subsidiary of a wholly-owned subsidiary Oriental Aromatic Limited, the Mahar greenfield project, which has been recently commissioned and is under a sales growth and sales stabilization phase is an asset under this subsidiary. There is a net loss due to the stabilization phase of the asset in our subsidiary to the extent of INR5.9 crore in Q4 and INR11.74 crore in FY ’25.
This loss is primary reason for a reduction of 1.35% in EBITDA in the net profit at the consolidated level. Investor friends are requested to make a note of the same. During the year, cash-flow stood — cash profit stood at INR58 crore, a significant increase compared to INR28.9 crore in the previous year. Return on capital employed for FY ’25 improved to 9.33% compared to 3.90% in FY ’24. Thank you. With this, we can now open the floor to the questions-and-answer session. Over to you,.
Questions and Answers:
Operator
Thank you. Thank you, sir. We will now begin with the question-and-answer session. Anyone who wishes to ask a question may press star N1 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 Ankit Gupta from Bamboo Capital. Please go-ahead.
Ankit Gupta
Thanks for the opportunity. So I’m sorry to interrupt Ankit, could you please speak a little louder? Thank you. Sorry, I’ll do that. So thanks for the opportunity. So on the cancer side, you did talk about the — that the prices are — seem to be bottoming out and things are improving. So can we expect that FY ’26, we should see some improvement in the margins there or how is like FY ’26 looking like for Tampa?
So primarily, I think we would like to be cautiously optimistic about the division. I think we are seeing an uptick in terms of pricing, but the competitive landscape still remains in a situation where there is oversupply and the demand is growing, but is growing very steadily. So unless you do not have certain strategic levers, the ability to have sustainable profit margins is always going to be challenging, right?
Unidentified Speaker
Okay. But perhaps on this — the two new forward integrations that we have done or the companies that will be selling and will be supplying 60% of our overall sales to them. So is this a new development which has happened by end of this financial year or like it has been earlier also. Sorry. Yeah. Yeah. So, I think you need
To bring in some clarity on the first part of the product.
Sure. Sure. So Ankit, as Dharmil mentioned that these two brands that he has just represented today have been part of our portfolio for almost the past 50 years. So the sales and the contribution have always been included in our numbers all throughout. I think what we have done in today’s investor call is just representing these brands because they have now been internalized.
And because they have now been internalized, they will be managed in a more efficient way. And regarding the 60% consumption, I think that is a very strategic moat that is being created because since 60% of the formulated of the camphor powder that we manufacture is used internally for these two strong brands. It kind of insulates us from the market situation where the camfor powder pricing is very challenging.
So just to just to clarify that these brands have always been part of our portfolio. They have been in a franchised model and the contribution of powder Camphor was going-in the franchising model. Today, we are just reintroducing them to the investor community as these brands have now been internalized.
So like the fluctuation in the pricing does impact there as well is what we were trying to indicate since this was let like since this brands we were earlier were part of our sales for the past many years now. It does impact, but it also being an FMCG product and a B2C customer gives you a little stronger strategic position than being in a B2B space where you are actually supplying powdered camfor to other formulated camphers.
Unidentified Participant
Okay, got it. And my second question was on the subsidiary part, the Mahad expansion that we have taken. So now since last quarter we were sort of the phase of stabilization. So where are we in terms of stabilization and ramp-up and how do you see the — this financial year for the subsidiary because last quarter and for full-year, we have incurred losses there. So do we expect to breakeven there and how do you see the ramp-up in the subsidiary for FY ’26?
Unidentified Speaker
So it’s a large greenfield project, unlike a lot of our investments in the past, which have been brownfield projects. Because of the greenfield nature of the project, we have ended-up doing capex, which is divided into two-parts. There is a general capex which was involved in development of the whole site for our future expansions as well. And then there was a dedicated capex which was done for this plant. And after a commercialization,
The samples have now reached all our customers. They have also reached the internal customer, which is our fragrance division. And I think we are getting very encouraging results. As we ramp-up volumes, this product gets added into our basket of products, which are already supplied globally by us to our global customers.
And we are very confident that the current — that the initial phase of production capacity that we have set-out for, which is 250 metric tons of this material would be sold-out in the coming quarters and we will be able to breakeven. Okay. So we should expect breakeven if not in Q1, at least in Q2, Q3 is what we can see. We will inform you about the development that we are seeing in terms of sales growth and sales stabilization.
But I wouldn’t really be very keen on giving you absolute numbers in terms of which quarter. We have to understand that this is an extremely large investment which has been done on a greenfield project.
Ankit Gupta
Sure, sir. Got it. Thank you and wish you all the best. Thank you.
Operator
Thank you. Participants, please restrict yourselves to two questions so that the management can address as many participants as possible. If you have any more questions, kindly rejoin the queue.
The next question comes from the line of Manish Dariwal from
Manish Dhariwal
Fiducia Capital Advisors. Please go-ahead very good afternoon and my compliment for a very detailed operating performance you shared with us. Now see it would help if you could in quantitative terms, share the relevance of each of the three divisions. So like we have a revenue of about INR928 crores that you’ve done.
So if you could share with us as how much each business contributes or the division contributes, that would give us a better perspective.
Unidentified Speaker
So, Manish, from a broad perspective, you know, we have always been mentioning that the three divisions, which is the Camphor and the Chemicals division, the Specialty Aroma ingredients division and the fragrance and flavor division individually contribute one-third of the total sales revenue that we achieved.
We have a plus or minus few percentage points every quarter depending upon demand or depending upon seasonality. But broadly speaking, the contribution of each towards the sales is one-throught.
Manish Dhariwal
Thank you. So since we are looking at the consolidated performance, so with, the expansion and Mahad facility, that would fall under which of the three divisions. I’m assuming it should be compound?
Unidentified Speaker
Yes. It would be currently with the first phase of product launch that has happened from Mart, it would be in our specialty aroma specialty ingredients. Yeah. Yes, yes, yes, yes. So would that change like from one-third, one-third to maybe a different number. So the broad objective is to continue growing each division.
And so what we have seen is over the years, whenever — because we have had substantial product launches in our specialty aroma ingredients division. But we have also had growth in the fragrance division. We have also had growth in our and Chemicals division in the past few years. So more or less stays in the same zone, plus or minus few percentage points.
Fair point, fair point. In fact, I’ve been a user of the cancer and it’s heartening to note that now the control and the whole operating mechanics of this particular component is with the company itself. So my compliment and all the best wishes going ahead. So glad to know that money. So glad to know that. If you can just drop me your phone number offline to the investor, we would send you a nice box of camp.
Manish Dhariwal
Oh, that would be very nice. That would be very nice. Thank you. Thank you.
Unidentified Speaker
Thank you. Thank you.
Operator
Thank you. The next question comes from the line of from BMSPL Capital. Please go-ahead.
Unidentified Participant
Yeah, hi, and thank you for taking my questions. So I have two questions. The first one is more on your debt and finance costs. We have risen quite a bit in FY ’25 versus FY ’24. So could you give some guidance over here for going into FY ’26, how would you look at your balance sheet debt levels and what’s the rate you’re paying on the debt on the total borrowings you have?
And that’s the first question. And the second question is just I’m trying to understand more on the cancer market, given the geopolitical risks. I understand it’s unpredictable, very unpredictable. But let’s say there’s a scenario where you know a basket of products from China’s tariff to a level where India is at an advantage. Do you see that improving our Cancer business in FY ’26?
Unidentified Speaker
Sure. So, on debt, you know, I would like to probably highlight that — and Girish, correct me if I’m wrong, that you know the long-term debt that we have is primarily to finance the brownfield project, which has come up in Baroda and our greenfield project and which, as I said, is in the growth — sales growth and sales stabilization phase.
I think the working capital debt is primarily against inventories and receivables, which are with marquee customers and keeping a relatively higher-level of inventories across all our divisions has been a strategic decision that we took this year because when it came to the fragrance division, we were seeing certain aroma chemicals and essential oils, which were at their lowest levels ever. And so it was a strategic decision to probably maintain a bit of higher inventories there.
When the same translated into our specialty Aroma ingredients division where we have seen certain raw-material feedstocks which are — which are available at their lowest levels — price levels for a long, long-time. And I think the only probably way from the current level is they would start going up. So these are strategic decisions that we have taken at the inventory level, which has resulted in a bit of additional working capital, which has resulted in higher finance costs.
But it’s something which we are completely under checked review and is strategic in nature. So that is about — that’s about the debt question. I think when you look at specifically CAMFOR, I think the geopolitical risks about tariffs would probably not impact CAMFOR per se as a product because if you look at the global use of Camphor,
I think a large part of it in India is used for the Puja space. But globally, it’s relatively a niche market used in pain management as well as in flu management, which is the and the tiger bombs of the world. So I think the centers where these products are manufactured are relatively stable in terms of the geopolitical risks. Having said that, the terpene chemical space and the specialty aroma ingredient space, if India turns out to be at a strategic advantage over China would be very, very interesting to see in the coming quarters to come.
Yeah. Also just to add to what Parag is saying, you have to understand that our business is not primarily now related to the powdered business. We are using 60% of the camphur we produce internally for our own brands. The realization between powdered Camphor and branded Camphor under our two brands is at an advantage to us selling the branded Camphor. Therefore, 60% is internally used. The rest is either in the pain management pharma space because we have a GMP plant.
And we have a very little amount of powder that we today offer to select geographies in India and to select customers that don’t compete with our own brands?
Unidentified Participant
Understood. Understood. So just to-end this question, how much percentage of your — so you’re saying most of your powder tampers used internally, right?
Unidentified Speaker
That was in my opening speech where I said yeah, it’s a moat for us because 60% we consume internally for our two brands. So even the expanded capacity in the country, we currently stay relatively insulated from it.
Unidentified Participant
Okay. Understood. How much percentage of your total campus is to the US? I wouldn’t know the exact numbers. I don’t know. It’s very limited, very limited.
Unidentified Speaker
Yeah. Okay. Extremely limited. It’s primarily only in the pharma space. And because we are USFD approved, we again have a — have a competitive strategic advantage over there. Correct. And if you look at the calls in the last three, four quarters that we’ve had where investors have been asking us about our strategy in the new expanded capacities in India scenario.
So we are just making a clarification to you all that these brands have been with us, we’ve internalized them largely because of the new competitive landscape and therefore insulated us from the warfare which is there on the pricing on the powder. Understood. Thank you so much for these clarifications.
Unidentified Participant
Really helpful. Thank you. Thank you.
Operator
The next question comes from the line of Richa from Equi Master. Please go-ahead.
Unidentified Participant
Sir, thank you for the opportunity. My question is based on as of this month, if you analyze it, what kind of capacity utilization is there in Mahat so currently, we probably — like I said that you know we commissioned the plant in November and we are still in the process of sampling, getting approvals. And if you have heard our few investor calls in the past, we have anywhere between 100 to 150-day cycle where the samples
Unidentified Speaker
Are taken by the customers, they are evaluated alteractively and also evaluated in applications. So we are currently in the process where we are building up stocks. And once we have these global approvals in, we should have a more, more substantial and more regularized business.
Currently, a lot of the sales that are happening are internally to our fragrance division and are also happening to spot buyers in the world. So I don’t have the exact number, but it’s relatively less. It will get ramped-up once we have the global approvals coming in and some allocations happening to us in the global assets.
Unidentified Participant
Okay. And these expansions of brownfield and the rink, assuming the pricing scenario across the segments remains similar, what kind of turnover do we expect on the gross now?
Unidentified Speaker
I mean, normally we normally stick to a number of 1.7 times in terms of the investments that we have done. In the situation, since it’s a big greenfield project and we have done investments for the — for the preparation of the site and certain specific investments that we have done only for the plant. We are going to probably stick to a turnover ratio of a very conservative ratio of between 1.4 to 1.5.
Unidentified Participant
Okay. And sir, like you said that this is just a start, going-forward, how much expansion is possible at this facility and what would be the capex plan for FY ’26 and ’27?
Unidentified Speaker
So currently looking at the competitive landscape for a wide range of products that we have introduced or we are currently manufacturing and the overall capacity utilization of all the global plants. I think we — we have taken a strategic decision that we are going to probably get into a mode where we are going to focus on stabilization, focus on capacity utilization and capacity selling of all our plants, focus on profitable growth. And when as and when we have very specific targeted opportunities, we are going to do capex.
I mean, in terms of — in terms of just the land-bank available, the Mahat facility can probably take three more plants, the size of the Evermos plant that we have constructed. So we have sizable amount of land-bank available for taking care of future expansions if and when they come along with the environmental clearance. But currently, we are going to focus more on stabilization, capacity utilization and sales.
Unidentified Participant
Okay. And sir, my last question is, sequentially there were two questions. Could you please rejoin the queue?
Unidentified Speaker
Sure, sure. Thank you. Thanks, sir.
Operator
The next question comes from the line of Anisha from Geo Ads. Please go-ahead.
Unidentified Participant
Hi. So I just had a question. Since there’s some pressure on price, which is mainly due to, let’s say, oversupply and imports from China, have we considered joining hands with other manufacturers to actually push maybe anti-dumping duties or in such safety duty? So to answer your question, Anisha, right now, we do not have any such conversations going on. And if there is any update on such conversations happening, we will revert back to you. Okay. Thank you.
Operator
Thank you. Thank you. The next question comes from the line of Saket, an individual Investor. Please go-ahead.
Unidentified Participant
Hi, am I audible?
Unidentified Speaker
Yes, Saket.
Unidentified Participant
You are. Yeah. So thanks for the opportunity and the detailed overview. So I have — so first question is what would be the say margin of this the legacy OL business excluding Mahad and trading?
Unidentified Speaker
And of course, last-time, Paraka, you are told that you have also gotten into, say, trading of certain commodities and I see that almost INR20 crores of stock in trade now reflects in our P&L. So what has been the fair revenue from the trading business and the working capital has worsened quite a bit both on receivers as well as inventory front.
So is the worsening largely because of the trading business or it is because of the legacy OL part? Sure. So to answer your question, Saket, in terms of we are giving you a number on the margins because of the wide range of buckets or the products that we operate, it would be really difficult to give you a kind of a margin number, point number-one. Point number two, in terms of — in terms of the operations of the trading division,
I think we are getting extremely good response from customers. This is a operation which is pretty much India-centric and it kind of acts as a hedge for us because of the increased volumes that we get because of this trading division, my overall cost of buying certain imported raw-material comes down, which helps my fragrance division for materials, which we do not produce and they are buying from outside. So that is the strategic reason why we have the trading division.
Regarding the worsening of the working capital. I mean, I had already mentioned in an earlier statement that it’s a very strategic decision to ramp-up inventories because we feel that the inventories at their current valuation are going to be assets for us in the coming quarters with the raw-material prices going up for a wide range of materials for which we have the inventories.
And certain marquee customers of ours have extended their payments beyond their stipulated period, which has kind of put a bit of the pressure on the receivables side. But I’m also glad to inform you that they are already in the process of course correcting and that situation will improve. So to answer your question, the working capital situation is strategic, intentional and we feel is going to deliver value. On the receivables side, the customers have already — have already been informed and they are taking corrective steps.
And the trading division seems to have taken off pretty well and the customers that we have, including the internal customer, which is fragrance division is very, very happy.
Unidentified Participant
Got it. So we used to have, say, two EBITDA guidance. One was 10% to 12% during the volatile phase and I think it’s 14% to 17% for the stable state. Now I think we were told that the EBITDA margin guidance stays the same. So which one should we refer to 10 to 12% or 14 to 17?
And if I look at our peers, they have now reverted back to their normalized margins. So when if — so what is the EBITDA guidance now going-forward?
Unidentified Speaker
And if not, when do we intend to say revert back to the normalized 14% to 17%, which used to be the guidance say in the normal scheme of things. So I mean, I can only say for ourselves and we like to always say that we are cautiously optimistic and we would like to stick to our guidance of 10% to 11%. And if we have the opportunity of improving our EBITDA margins.
We definitely — Parak, you said 11%. Sorry, 10% to 12%. And if we have the opportunity of improving them in any which way or form because of things that we are doing internally or externally, we will come back to the investor community. So is trading business also diluting it by a bit because trading is usually less — has carries lesser margin than manufacturing operations in the normal scheme of things. So is that also the reason why it remains 10% to 12% despite all the divisions now reverting back and I’m excluding Mahar.
Unidentified Participant
Will take its time, but is that also one of the reasons why the margin remains 10% to 12% despite normalized operations now in most of the segments and even we now forward integrating into becoming now B2C players in Camphor?
Unidentified Speaker
So Sakesh, I think if you look at the current size of the trading division compared to the size of the overall consolidated group, the size of the trading division currently stays extremely tiny, a B, I think like I said that the trading division has a dual role and hence, we are not going to look at the trading division just by the ability to generate margins when they do individual transactions.
So to answer your question, I don’t think it’s the trading division. I think it’s our approach and our philosophy that we want to be cautiously optimistic and keep it in that 10% to 12% range and try to get it better and under-commit and over-delivered. Now thanks. I hope you are deliver.
Unidentified Participant
Thanks for the — thanks for queu. Thank
Operator
You. The next question comes from the line of Desai from Total Capital. Please go-ahead.
Unidentified Participant
Hi, good afternoon, everyone. Am I audible?
Unidentified Speaker
Yeah,, you are. Yeah. Okay. Sir, the first question is that we talked about this internalization of these two brands on the cancer side, which is B2C. So just wanted to understand whether that changes and it was all muted already, it was reflected in numbers as such, just that instead of franchisee now, it’s an internalized thing. So in terms of numbers, will it change anything because of this, at least in terms of margin or ability to price?
And a related question to that is that even though it’s a B2C thing, at the end-of-the day, it’s a competitive market. So our ability to price or pass-on price may be limited or so given that the margin pressure, is it going to reduce because of this? Is that how you’re looking at it?
It’s more like internal consumption and we are not at the winds and fancies of the market so primarily I think it is a bit of everything a consuming large percentage of your output internally gives you definite margins at least for that percentage point. So it kind of insulates you from the market forces, point number-one.
Point number two, the brands that we are mentioning today are brands that have been in the market for a large period of time. So have a sizable amount of reputation and hence demand a certain level of premium, which is not available when you actually go and try to sell the best powdered camfor that is produced by any plant in India. So if you just add-up all these dots, I think we should — and currently, we have just finished the process of induction.
So the whole — so the whole play in terms of now offering — produce — having a better product offering to the market because it was earlier franchised, so having better controls, having better product offerings. I’m sure all these added together would eventually have put us in a situation where we will — where we will have stability in margins and the ability to have better margins vis-a-vis just selling the power.
And those will be — those will be factored into the coming quarters. Like I said that Q3 and Q4 have been, you know, for us at the Camphor and the Chemicals division, in-spite of a very challenging competitive landscape have been better quarters compared to the last many quarters. And to add to that, if you take the 60% of internal consumption, we have started with a very truthful number. So what would be interesting to see is in the in the years ahead, if we are able to take that 60% to 75% and what impact would that have on our margins.
So I think 60% is a good starting point for our investors to track our continuous growth of growth of this brand. Got it. Just one clarification. So it is safe to assume that till these brands were internalized and on the franchisee model, our supply to them was significantly lesser and now it will ramp-up, right?
Unidentified Participant
Yes. Got it. Got it. And second question is on volume growth, you know, Paral, if you can develop a bit on the volume growth side, you know, so from whatever capacities that we have put up, including Mahar, which was coming on-stream, I think Aroma chemicals should do very good in terms of volume growth. FNF also, I think the commentary is very strong. So I’m assuming that double-digit volume growth is what we’re targeting. So these two probably we are looking at a decent volume growth and for a slightly more subdued single-digit growth or a stable number. Is that how we should look at the overall picture?
Unidentified Speaker
I think, Punil, you have summed it up well. We also — I mean, the whole investor community also has to be mindful that if you look at the trajectory of Oriental Aromatics in the last four to five years, you know, every quarter when we have come and had a chat with you, we have had a plant which was just commissioned. So it had a number of products which were in that first 100 phase — days phase of getting approvals, etc., etc
. So I think that whole cycle, which started with the multi-product plant in 2019 has now kind of seen its first phase of culmination where I think the first basket of products that we wanted to go to the world market with are already except Mahad, most of the plants are now, I think out-of-the 100-day cycle. So now and assuming that growth in aroma ingredients has come back to a stable level, we should only see the volume going up north.. So to say the aroma ingredients is going to function like this.
The fragrance division, as you rightly said that the commentary seems to be very strong and the base seems to be very low for us to really continue to grow. And the and the terpene chemical space is something where I think I mean the Pipuja segment surprises me every time and it shows a very strong CAGR growth in India. So I wouldn’t kind of discount it at all. And like Dharmil said that because it has now been internalized and all the oriental efficiencies will come into play, we wouldn’t be surprised that we are then internally using more powder and hence getting more share of the market.
Unidentified Participant
Great, great. Very useful and I really appreciate the very detailed commentary this time from you guys. And I hope that this kind of a color, if you continue to give, I think that would be very helpful to us. Thank you.
Unidentified Speaker
Thank you,.
Operator
Thank you. The next question comes from the line of Richard from Equity Master. Please go-ahead.
Unidentified Participant
Sir, thanks for giving me another opportunity. My question is on sequential gross margins. I think you have accomplished from 40% to 38%. So if you could elaborate on what were the factors, which segments did you see this competition coming from? And what would be the guidance for my gross margins going-forward considering that we are looking at value-add et-cetera. Girish, you are on-mute, I think. Would you want to answer this?
No, there is a question gross margin. Yeah, gross margin actually because could you be a little louder, please?
Unidentified Speaker
Yeah. Gross margin will be — stays in the 40%, 39%, 40% levels. But for this quarter, there was a compression theme like 38% from 30% in December quarter. And December quarter I think was already subdued for you. So if you could just elaborate on what was the reason on-going, I will take this if — and correctly, if my understanding is correct, Richa, if you’re looking at just the quarter numbers,
You know, for this particular quarter, we had some one-time expenses, which we had incurred for sales promotion activities where we had participated in certain global exhibitions as well as certain national exhibitions to promote our fragrances and aroma ingredients. So if you are looking at a quarter level,
The quarter level numbers in terms of profitability are impacted because of this one-time expenses. But would that come in gross margin because I’m assuming that would flow-in perhaps other expenses now?
Okay. So Girish, then if you can give some raw-material up because of that. Okay. Yeah. Major reason was that. Some raw-material prices has shown an increased trend in the current year. Okay. Okay. And sir, of the 46% exports that you are — that you are getting, how much exposure is there to the US market overall? So I wouldn’t have the exact numbers with, but you can reach-out to the Investor Relationship team with your question and we will revert back to you with an answer.
Unidentified Participant
Okay, thank you. And sir, last, if I may, what is the extent of backward integration and going-forward, I mean, given all those fluctuations in raw materials, finished prices, do you have any strategy to increase further?
Unidentified Speaker
Madam, our investments in the specialty aroma ingredients division is a proof that we wish to kind of leverage the whole backward integration piece to help our fragrance division and also our internalizing of the brands shows our commitment towards forward integration. Is there a way to quantify it
Unidentified Speaker
Madam, it’s a dynamic situation where every new product launch kind of then initiates an activity in our creative division to use it more. So it’s very difficult to really quantify. It’s an ongoing process where — but the commitment is there.
Unidentified Participant
Okay. Okay. Thank you and all the best. Thank you.
Operator
Thank you. The next question comes from the line of Devanshu, an individual investor. Please go-ahead.
Unidentified Participant
Yeah. Hello, sir. Good afternoon. Just one question. Can you give a sense of what are the three divisions you know, profitability or EBITDA margins and how they’ve behaved in the last three to four years what’s the trend? Can you just give a sense of that?
Unidentified Speaker
So Devan, should we normally do not give division level profit numbers. We always give it at the consolidated level. So would it be possible to give you for us to get a sense of the breakup, like you mentioned for the sales one-third each, can you give a sense of that, how it stands out of FY ’25?
You can probably reach-out to our investor relationship sale and they will then speak with the finance and if possible, we can share it with you.
Unidentified Participant
Sure. I’ll do that. Thank you very much. Thank you.
Operator
Thanks,. Thank you. A reminder to participants, you may press one to ask a question. Ladies and gentlemen, ladies and gentlemen, as there are no further questions, I would now like to hand the conference over to Mr Bodhani from Oriental Aromatics Limited for the closing remarks.
Dharmil Bodani
Thank you all for participating in the earnings conference call. I hope we’ve been able to answer your questions satisfactorily. If you have any further questions or would like to know more about the company, we would be happy to address the same. We are very thankful to all our investors who continue to stand-by us and also have shown confidence in the company’s future growth plans.
And with this, I wish everyone a good afternoon. Thank you.
Operator
Thank you, sir. Ladies and gentlemen, on behalf of Oriental Aromatics Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines okay