Camlin Fine

Camlin Fine Sciences reported Q4 FY26 revenue of INR 424 crores and a total FY26 revenue of INR 1,723 crores. The quarter's sales were significantly impacted, declining by approximately 20% due to delays in shipments, lack of available vessels, and increased freight times, all exacerbated by ongoing geopolitical conflicts. This environment also led to increased raw material prices and affected working capital cycles. Q4 EBITDA stood at INR 21 crores, representing a 5% margin, which management deemed a reasonable performance given the circumstances.

In response to a drastic increase in phenol prices (from INR 85/kg to over INR 150/kg), Camlin Fine Sciences has made a strategic decision to reduce cash burn by discontinuing internal production of catechol and hydroquinone from its diphenol plant. The company will now import hydroquinone from China at a more competitive rate to support its downstream Straights business. Existing catechol stock, sufficient for 8-9 months of vanillin production, will be utilized, and a decision on repurposing or permanently closing the diphenol plant is pending.

The vanillin segment experienced improved realizations, with prices increasing from sub-$11 to over $12.5 in Q4 FY26. This trend is expected to continue, with Q1 FY27 blended realizations projected to be in the $13.5-$14 range, primarily due to the reduction of US tariffs from 50% to 25%. The company has shifted its production focus to ethyl vanillin, with orders for approximately 300 metric tons in Q1 FY27 and a planned campaign for 600 metric tons. Management targets 2,200-2,400 metric tons of vanillin sales in the US for FY27.

The Blends business demonstrated robust growth, closing FY26 with INR 1,050 crores in revenue (including discontinued operations), representing a 17% growth rate. For FY27, Camlin Fine Sciences targets an upward revenue of INR 1,400 crores for the Blends segment. Acquisitions like Vinpai and Vitafor are expected to contribute positively, with both projected to achieve above breakeven EBITDA in FY27, supported by strategic investments in expanding the global sales force.

The company ended FY26 with approximately INR 670 crores in debt, with an estimated consolidated repayment of INR 60-70 crores for FY27, which management deems manageable. A significant one-time^📎 gain of INR 100 crores was booked in Q4 FY26 from the liquidation of CFS Europe, which will also eliminate an annual cash burn of INR 50-60 crores from next quarter. While authorized capital was increased, the company prioritizes debt over equity infusion for funding growth and managing liquidity, actively seeking market support for debt.

Camlin Fine Sciences projects FY27 revenue to be between INR 2,200-2,400 crores, with EBITDA margins targeted in the 12-14% range. Despite significant increases in raw material costs (phenol, glycolic acid, caustic) and tripling of logistics costs for American shipments, management expects to maintain overall cost control. The company believes it can pass on most cost increases in its Straights business and is exploring making its plant multipurpose to further reduce raw material costs.