Fine Organic Industries Q4 FY26 earnings call

Fine Organic Industries Limited reported a 4.3% year-on-year increase in revenue from operations, reaching INR 2,365 crores for FY26, up from INR 2,269 crores in FY25. Profit after tax also saw a modest growth of 1.6% year-on-year, totaling INR 417 crores compared to INR 410 crores in FY25. Despite a challenging macroeconomic environment, the company maintained a healthy EBITDA margin of 20.4% for the financial year, demonstrating resilience in its operational efficiency.

The company is actively pursuing several strategic expansion projects globally. It has invested INR 192.5 crores to date in its JNPA (SEZ) manufacturing project in India, with commercial production expected by FY28. Additionally, Fine Organic has acquired 160 acres of land in South Carolina, USA, for a new manufacturing unit, backed by an equity investment of approximately INR 9.6 crores. Further, the company infused INR 49.5 lakh into its Dubai subsidiary and increased equity by INR 6.17 crores in its Thailand joint venture to support future business growth and enhance regional presence.

Fine Organic Industries Limited's Board approved the acquisition of up to an 80% stake in Oleofine Organics BHD, Malaysia, a food additives manufacturer with a turnover of approximately INR 54 crores as of January 31, 2026. The transaction, valued at approximately INR 82.9 crores, is expected to be completed within the next three months. This acquisition is a strategic move to strengthen the company's presence in the specialty additives space and expand its international footprint in the growing Asian region, leveraging Oleofine's palm-based product portfolio.

The company faced significant input cost pressures throughout FY26, with raw material prices remaining higher than FY25 and experiencing a marginal increase in Q4 FY26. This was primarily driven by volatility in global commodity markets, higher feedstock costs, and increased demand for vegetable oils for biodiesel. Freight costs also rose in Q4 FY26 due to disruptions from the West Asia conflict. Management expects raw material prices to remain elevated at least through 2027 and has shifted to short-term (1-3 months) contracts with cooperative customers to mitigate volatility.

All of Fine Organic's manufacturing facilities are currently operating at almost full capacity, leading management to project flat revenue growth for FY27. Growth is anticipated to resume only after FY28, once the JNPA (SEZ) and US plants are commissioned. The company aims to maintain a sustainable EBITDA margin in the 18-20% range, a figure consistent with its 10-year historical performance, provided raw material prices do not escalate excessively.

Employee costs increased by approximately 15% in FY26, significantly higher than the 4.3% revenue growth. This rise is attributed to strategic hiring for upcoming projects like the SEZ and US plants, as well as strengthening existing teams and including director's salaries. The company expects similar growth in employee costs for FY27, excluding a one-time^📎 gratuity provision of INR 7 crores, as it continues to invest in human capital to support its ambitious expansion plans.

Management disclosed that a land acquisition in Gujarat was delayed by 1-1.5 years due to a policy decision by the state government, which did not want chemical companies in that specific section. This unforeseen delay impacted the company's ability to pursue continuous capex and preponed expansion, highlighting a challenge in executing its growth strategy despite proactive planning.