Camlin Fine — Q2 FY26 earnings call

Call held 10 Nov 2025

Management summary

Camlin Fine Sciences delivered a strong Q2 FY26, with revenue growing 8.6% sequentially to ₹460 crores, driven by volume increases in both straights and blends. EBITDA saw a substantial recovery to ₹33 crores, achieving a 7.27% margin, supported by optimal plant utilization. While Vanillin volumes rose, realizations faced pressure from tariffs and channel destocking, which is projected to clear by Q4 FY26 in the US and Q1 FY27 in Europe. The company remains on track for its full-year revenue guidance and anticipates further growth from its Blends segment and the upcoming Vinpai acquisition.

Highlights

  • Revenue of ₹460 crores, up 8.6% QoQ.

  • EBITDA at ₹33 crores, a significant increase from ₹19 crores QoQ.

  • EBITDA Margin stood at 7.27% for the quarter.

  • Gross Margin improved to 46% in Q2 FY26, up from 43-44% in Q1 FY26.

  • Blends business grew 8% QoQ, targeting 18-20% YoY growth.

  • Vanillin volumes increased 35% QoQ, with a FY26 target of 2,500 tons and FY27 target of 4,000 tons.

  • Net Debt reported at ₹520 crores.

  • Vinpai integration expected by end of November 2025, consolidating from Q2 FY26.

Concerns

  • Tariff pressure on Vanillin exports to US

  • Channel inventory overhang for Vanillin in US and Europe

  • China dumping of Vanillin in non-US/Europe markets

Key financials

  1. Revenue ₹460 Cr +8.6%QoQ
  2. EBITDA ₹33 Cr +73.7%QoQ
  3. EBITDA Margin 7.3%
  4. Gross Margin 46%
  5. Net Debt ₹520 Cr

What they filed

Q1 FY27: revenue up 16.2%, net profit down 9.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue227 205 273 191 244 +7%219 +7%184 −33%222 +16%
EBITDA14 16 33 5 18 +29%19 +19%6 −82%7 +40%
Net profit-73 -6 16 -11 -4 +95%-13 −117%-6 −137%-12 −9%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Blends
    8% Revenue Growth
  • Aroma (Vanillin)
    35% Volume Growth11 $/kg Realization
  • Straights (TBHQ, BHA)
    40% Volume Growth

Guidance & targets

Revenue

  • Total Sales Revenue · FY26 · High confidence ₹2,000-2,100 crores
    No, that we are on line for about 2,000-2,100.

    — Nirmal Momaya

Volume

  • Vanillin Sales Volume · FY26 · High confidence 2,500 tons

    Previously 2,500-3,000 tons → 2,500 tons

    So we are good for the 2,500.

    — Nirmal Momaya

  • Vanillin Sales Volume · FY27 · High confidence 4,000 tons
    Vanillin, I think we should be looking at about 4,000 tons in the next year.

    — Nirmal Momaya

Growth

  • Blends Business Growth Growth · FY26 · High confidence 18-20%
    And for the Blends also, we are the 20% that we are saying between 18%-20%, I think we are okay for that as well.

    — Nirmal Momaya

  • Blends Business Growth Growth · FY27 · High confidence 20%
    And the Blends business also, we are looking at growing it by 20%.

    — Nirmal Momaya

Headcount

  • Employee Cost Headcount · going forward · Medium confidence small, some percentage increase
    So, there could be a small, some percentage increase in employee cost going forward.

    — Santosh Parab

Other

  • Vinpai Integration Other · November 2025 · High confidence by November end
    So, we are expecting it by November end.

    — Nirmal Momaya

Profitability

  • European Discontinued Business Loss Profitability · FY26 · High confidence ₹25 crores
    But on an average for the year, it will be for this year, it will be around Rs. 25 crores odd.

    — Santosh Parab

  • European Discontinued Business Loss Profitability · FY27 onwards · High confidence ₹2 crores per quarter
    Going forward next year onwards, it will come down to Rs. 2 crores per quarter.

    — Santosh Parab

  • China Discontinued Business Cost Profitability · FY26 · High confidence ₹1 crore
    We also have other discontinued business of China, which has a cost of around a Rs. 1 crore cost

    — Santosh Parab

  • China Discontinued Business Cost Profitability · from FY27 · High confidence No cost
    then there will be no cost going from FY'27.

    — Santosh Parab

Capacity

  • Diphenol Facility Full Capacity Cost Capacity · at full capacity · High confidence $8
    At full capacity, it will come to $8.

    — Santosh Parab

Risks & concerns

  • Tariff pressure on Vanillin exports to US

    high

    50% tariff levied on Indian exports to US is putting pressure on Vanillin realization.

    Management acknowledged

  • Channel inventory overhang for Vanillin in US and Europe

    high

    Destocking in the US is expected by Q4 FY26, and in Europe by Q1 FY27, impacting current demand and realization.

    Management acknowledged

  • China dumping of Vanillin in non-US/Europe markets

    high

    Chinese competitors are selling Vanillin at very low prices ($7-$7.5) in these markets, making it difficult to compete.

    Management acknowledged

  • Local competition in India for TBHQ, BHA

    medium

    Heightened local competition is causing realization pressure in the straights business.

    Management acknowledged

  • Slowdown in US pet food business

    medium

    Slowdown in the last two quarters, but now seems to be improving and picking up again.

    Management downplayed

  • Syensqo restarting synthetic Vanillin unit in France

    low

    Management believes there is still a 3,500-ton market gap in Europe that they can fill despite Syensqo's 5,000-ton capacity.

    Analyst downplayed

Areas of evasion (1)

  • maximum outward contract signed

Q&A highlights

3 direct
Vanillin Channel Inventory and De-stocking Timeline Direct
The de-stocking in the US is expected to be completed by Q4 of this year. And in Europe, it is expected to be cleared by Q1 of FY'27. Because Europe, the anti-dumping duty was levied only in July. So there was a large amount of channel stocks lying in Europe.

Clarifies the extended timeline for a key demand headwind, indicating when market conditions might normalize for Vanillin, and explains the reason for the delay in Europe.

Asked by Rehan

Impact of Tariffs on Vanillin Realization and Volume Strategy Direct
The final price in the market is around $20. Now, our net realization today is $12 because of the tariff in between. ... If the prices remain at $12, channel stocks are out, we will be increasing our production, say, to much more. As you know, we are running at 50%.

Explains the current margin pressure on Vanillin due to tariffs and outlines the strategy to increase volumes and improve margins once channel inventory clears, even if tariffs persist, highlighting current low utilization.

Asked by Surya Narayan Patra

Financial Impact and Timeline of Discontinued Operations Losses (Europe & China) Direct
For the year, it will be around Rs. 25 crores odd. Going forward next year onwards, it will come down to Rs. 2 crores per quarter. ... We also have other discontinued business of China, which has a cost of around a Rs. 1 crore cost, which we have already initiated liquidation proceeding, then there will be no cost going from FY'27.

Provides clear financial impact and a specific multi-year timeline for the reduction of losses from discontinued European and Chinese operations, which is crucial for future profitability.

Asked by Raj Agrawal

2 min read 6 chapters

Detailed narrative

Q2 FY26 Financial Performance Overview

Camlin Fine Sciences reported a robust Q2 FY26 with revenue reaching ₹460 crores, marking an 8.6% sequential growth. The company's EBITDA saw a significant improvement, climbing to ₹33 crores (7.27% margin) from ₹19 crores in the previous quarter. Gross margins also expanded to 46% in Q2 FY26, up from 43-44% in Q1 FY26, attributed to optimal capacity utilization at its Tarapur and Dahej plants.

Segmental Growth and Realization Pressures

The Blends business demonstrated strong sequential growth of 8% and is targeted for 18-20% YoY growth. Vanillin volumes increased by 35% QoQ, but net realizations remained subdued at $11-12 per unit due to a 50% tariff on Indian exports to the US and existing channel inventory. The Straights business (TBHQ, BHA) also saw a 40% QoQ volume increase, despite facing realization pressure from heightened local competition in India.

Vanillin Market Dynamics and Destocking Timeline

The company is navigating a challenging Vanillin market characterized by significant channel inventory in the US and Europe. Management expects destocking in the US to conclude by Q4 FY26, while Europe's inventory is projected to clear by Q1 FY27, a slight delay from previous estimates. Despite these headwinds, the company is targeting Vanillin sales of 2,500 tons for FY26 and an ambitious 4,000 tons for FY27, leveraging its current 50-55% capacity utilization.

Strategic Acquisitions and Capacity Utilization

The integration of Vinpai, a new acquisition in France, is anticipated by the end of November 2025, with consolidation expected to begin in Q2 FY26, contributing additional revenue. The Diphenol facility is currently operating at 50-55% utilization, producing around 700 metric tons against an annual capacity of 6,000 metric tons. Management noted that current production costs are $9.5-10 per unit, which is expected to decrease to $8 per unit at full capacity.

Discontinued Operations and Future Profitability

Camlin Fine Sciences provided clear timelines for the reduction of losses from its discontinued operations. The European diphenol plant, which was mothballed, is expected to incur approximately ₹25 crores in losses for FY26, projected to significantly reduce to ₹2 crores per quarter from FY27 onwards. Similarly, the discontinued China business, currently incurring about ₹1 crore in costs, is expected to have no cost impact from FY27 following liquidation proceedings.

Outlook and Growth Drivers

The company reiterated its full-year revenue guidance of ₹2,000-2,100 crores. Key growth drivers for the next fiscal year include a target of 4,000 tons for Vanillin sales and a 20% growth in the Blends business. Management is also expanding its field force by approximately 21% (31 people added this quarter) to support the Blends segment's growth, with the impact expected to be visible from Q4 FY26 and Q1 FY27.

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