Camlin Fine — Q4 FY25 earnings call

Call held 23 May 2025

Management summary

Camlin Fine Sciences delivered a resilient Q4 and FY25 performance, with core business revenue growing 15% YoY and EBITDA improving by 12.5%. The Blends segment showed strong growth, and the Aroma business, particularly vanillin, is poised for significant gains due to anti-dumping duties. The company successfully reduced its net debt and outlined a clear strategy for minimizing losses from discontinued operations, aiming for full vanillin capacity utilization within two years.

Highlights

  • Q4 FY25 total turnover was INR 437 crores, up from INR 431 crores in the last quarter.

  • FY25 annualized total turnover reached INR 1,666 crores, growing from INR 1,453 crores in the comparable last year.

  • Core business revenue grew by approximately 15% year-on-year.

  • Core business EBITDA improved by 12.5% to INR 208 crores in FY25, up from INR 184 crores last year.

  • Blends business grew 17-18% year-on-year, reaching INR 878 crores in FY25 from INR 747 crores last year.

  • Aroma business contributed INR 176 crores to revenue in FY25.

  • Vanillin capacity utilization is currently 45-50%, with a target to reach 100% in the next 2 years.

  • Net debt improved from INR 564 crores to INR 492 crores.

  • Cash burn from discontinued operations is expected to reduce to INR 8 crores in Q1 FY26, and further to INR 4-5 crores annually in FY27.

Key financials

2 periods

Headline

  • Revenue
    ₹437 Cr
    QoQ +1.4%
  • Net Debt
    ₹492 Cr

FY25

  • Annualized Revenue
    ₹1,666 Cr
    YoY +14.7%
  • Core Business EBITDA
    ₹208 Cr
    YoY +13%
  • Blends Business Revenue
    ₹878 Cr
    YoY +17.5%
  • Aroma Business Revenue
    ₹176 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.

Guidance & targets

Revenue

  • Blends business revenue growth Revenue · next 2 to 3 years · Medium confidence about 20%
    Essentially, we should grow that blends business by about 20% going forward in the next 2 to 3 years.

    — Nirmal Momaya

  • DHA and Omega products growth Revenue · FY26 (if contracts materialize in next 3-4 months) · Low confidence big jump
    If they come to fruition, which we should know in the next 3 to 4 months, then in FY '26, you could see a big jump in that.

    — Nirmal Momaya

  • Blends (Italy/Europe) annual revenue Revenue · High confidence INR 50 crores to INR 60 crores
    Yes. So at present, blends for the annual blends is in the -- in terms of INR50 crores to INR60 crores.

    — Santosh Parab

Profitability

  • Blends business EBITDA margin Profitability · as they mature · Medium confidence high teens, moving towards 20%
    And the EBITDA margins will improve in some of the geographies because there is a certain threshold. So it will be in the high teens, the EBITDA margin. ... And as Nirmal said, these are high-teen business and as they mature, they move towards 20%.

    — Nirmal Momaya

Capacity

  • Vanillin plant capacity utilization Capacity · next 2 years · Medium confidence 100%
    In the next 2 years, we want to take it up to 100% as the market development gets better. The idea is to take it, go 100% in the next 2 years.

    — Nirmal Momaya

Other

  • Discontinued operations cash burn Other · Q1 FY26 · High confidence not more than INR 8 crores
    Yes. Cash burn should not be more than INR8 crores. Going forward on employee cost, there could be some fixed cost to be incurred because it's a plant is abandoned, but we are mothballing it. So there could be some janitorial costs and security cost, side cost.

    — Santosh Parab

  • Annualized cash burn from discontinued operations Other · FY27 · High confidence INR 4 crores to INR 5 crores
    So, the cash burn over a period of time on an annualized basis should not be more than INR4 crores to INR5 crores.

    — Nirmal Momaya

  • Vinpai acquisition completion Other · by July end · Medium confidence next 2 months
    So, I think the regulatory procedures, I think corporate actions and all that required to be done should be completed in the next 2 months, and that should be done by July end.

    — Nirmal Momaya

Market Share

  • Vanillin sales to anti-dumping markets (US/Europe) Market Share · Medium confidence about 70%
    Our estimate is about 70% should go into those markets. 30% is in other markets.

    — Nirmal Momaya

Margin

  • Gross margin range Margin · Medium confidence 45% to 55%
    it will be in the region of 45% to 55% in that zone.

    — Nirmal Momaya

Risks & concerns

  • General global situation (tariffs, war)

    medium

    General global situation on tariffs and war and all these things has been a very difficult time.

    Management acknowledged

  • Pricing pressure from competition (on products other than vanillin in specific markets)

    medium

    Yes, there's pricing pressure on all products. Except vanillin right now because -- in 2 markets. But otherwise, there's a lot of pricing pressure coming from competition from China.

    Management acknowledged

  • Vanillin destocking in the U.S. market

    medium

    Yes, yes. So that will take a few months for the destocking to happen. So that's part of the reason why we said it'll take more than a year to ramp up to 100%.

    Management acknowledged

  • Regulatory procedures for Vinpai acquisition

    low

    So, I think the regulatory procedures, I think corporate actions and all that required to be done should be completed in the next 2 months, and that should be done by July end.

    Management acknowledged

Areas of evasion (3)

  • Specific vanillin export volumes to the U.S.
  • Exact current vanillin price (only ranges provided)
  • Precise market share for blends business

Q&A highlights

2 direct
Vanillin sales Q-o-Q and price realization strategy Partial
As you know, we have been selling in U.S. So, there is a stock on sea. It's one thing. We also control the sales because we are looking that the prices will increase. So, it doesn't matter to wait for a couple of quarters to get a $15 realization than a $12 current realization.

Reveals management's strategic decision to hold back vanillin sales to achieve higher price realizations, potentially impacting short-term volume growth.

Asked by Jatin Sangwan

Breakup and reduction timeline of discontinued losses Direct
So as we said, because the decision of abandoning was taken, we had to really clean up the plants and other things. So, there are some one-time losses expenses which we incurred in this quarter. These are not regular, around INR14 crores of that is non-routine. But we will be reducing the employee cost. The employee cost is a major portion in this. Annual employee cost for Europe was INR16 crores, which is going to reduce in the next financial year by at least 90%.

Provides specific details on the nature of discontinued losses (one-time vs. recurring) and a clear timeline for their significant reduction, which is crucial for future profitability.

Asked by Jatin Sangwan

Vanillin inventory in the U.S. and its impact on scaling up production Direct
See, we can't really estimate what kind of vanillin stocking has happened in U.S. and how much anybody is carrying. But you could certainly we could certainly see that there is some release of stock, and hence, our sales in U.S. are growing. That's why we are saying that it's just ramping up the production to 100% in the first year itself may be detrimental even to the prices. So we feel that with respect to our capacity, we will be reaching 100% over a period of next 2 years.

Explains the market dynamics (pre-buying, destocking) affecting the vanillin sales ramp-up despite anti-dumping duties, and reiterates the 2-year timeline for achieving full capacity utilization.

Asked by Niraj

3 min read 6 chapters

Detailed narrative

Q4 FY25 and Full Year Performance Overview

Camlin Fine Sciences reported a Q4 FY25 turnover of INR 437 crores, a slight increase from INR 431 crores in the previous quarter. For the full year FY25, the company achieved an annualized turnover of INR 1,666 crores, marking a significant increase from INR 1,453 crores in the comparable last year, representing a ~15% year-on-year growth in the core business. Core business EBITDA improved by 12.5% to INR 208 crores in FY25, up from INR 184 crores last year, despite challenging global conditions and pricing pressures on several products.

Discontinued Operations and Cash Burn Reduction

The company has formally abandoned its Diphenol unit in Europe and Vanillin manufacturing unit in China, which had ceased operations two years prior. These are now classified as discontinued operations, with all prior quarter impacts regrouped. Management expects the cash burn from these discontinued operations to reduce substantially, projecting not more than INR 8 crores in Q1 FY26. Further reductions are anticipated, with an annualized cash burn target of INR 4-5 crores in FY27, primarily through reducing employee costs and mothballing plants.

Vanillin Business Outlook and Anti-Dumping Duties

The Aroma business, primarily driven by vanillin, contributed INR 176 crores to FY25 revenue and is a key growth driver. The company's vanillin capacity utilization currently stands at 45-50% but is targeted to reach 100% within the next two years as market conditions improve. Anti-dumping duties (ADD) imposed by the U.S. and a preliminary duty of 131% by the European Union are expected to significantly benefit vanillin prices, with current U.S. prices in the $15 range and Europe around $12. Management anticipates approximately 70% of its vanillin sales will go to these anti-dumping markets.

Blends Business Growth and Strategic Acquisitions

The Blends business demonstrated robust growth, increasing 17-18% year-on-year to INR 878 crores in FY25, up from INR 747 crores. This growth was observed across North America, Central America, South America, India, and Europe. The acquisition of CFS Vitafor in Belgium contributed around INR 85 crores in its first nine months. The company aims for a 20% growth rate in the blends business over the next 2-3 years, with EBITDA margins expected to be in the high teens, moving towards 20%. The acquisition of Vinpai is expected to be completed by July end, further boosting growth, particularly in the food segment.

Balance Sheet Strengthening and Debt Reduction

Camlin Fine Sciences successfully completed a rights issue in January 2025, which contributed to an increase in equity. The company has also made significant progress in controlling its overall debt position, with net debt improving from INR 564 crores to INR 492 crores. This reduction in debt, coupled with the focus on profitable growth segments, positions the company for better financial stability and future expansion.

Gross Margin Dynamics and Product Mix

The company's gross margin is currently in the range of 45% to 55%. Management noted that converting Catechol to vanillin significantly improves gross margins. While there is pricing pressure on several products due to aggressive competition from China, the positive impact from the growing vanillin business and its higher margins is expected to help maintain the overall gross margin within the stated range. The company is strategically managing its sales to optimize realizations, particularly for vanillin.

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