Oriental Aromatics Limited — Q3 FY26 earnings call

Call held 13 Feb 2026

Management summary

Oriental Aromatics reported a mixed Q3 FY26, with operating revenue growing 13% YoY to ₹252.03 crore and sales volumes up 10% YoY. However, profitability was impacted, resulting in a net loss of ₹1.92 crore and an EBITDA margin of 5.26%, primarily due to pricing pressure in the ingredients market and the stabilization phase of the new Mahad facility. Despite sequential softness, the company saw positive year-on-year volume growth and maintained a healthy net debt-to-equity ratio of 0.65x. Management remains focused on volume growth, market share, and process improvements, expecting Mahad's contribution to improve as utilization rises.

Highlights

  • Q3 Operating revenue of ₹252.03 crores, up approximately 13% YoY.

  • Q3 Sales volumes increased 10% year-on-year.

  • Nine-month production grew 11% and sales volume grew 10% versus last year.

  • Net debt-to-equity stood at 0.65x as of 31st December 2025, indicating balance sheet discipline.

  • Mahad plant is running at 30-35% capacity within 7 months of starting real production, with expectations of achieving independence in the next two quarters.

Concerns

  • Q3 resulted in a net loss of ₹1.92 crore, compared to a net profit of ₹7.14 crore in the same period last year.

  • Q3 EBITDA margin was 5.26%, a significant moderation from the previous year, primarily due to pricing pressure and Mahad's stabilization phase.

  • Nine-month period recorded a net loss of ₹0.67 crore, against a net profit of ₹32.90 crore in the prior nine months.

  • Mahad greenfield facility is currently a near-term drag on consolidated profitability.

  • Pricing remains under pressure, especially in the ingredients market, which is still a buyer's market.

Key financials

3 periods

Headline

  • Net Debt-to-Equity
    0.65×

Q3

  • Operating Revenue
    ₹252.03 Cr
    YoY +13%
  • EBITDA
    ₹13 Cr
    YoY -43.5%
  • EBITDA Margin
    5.3%
  • Net Loss
    ₹-1.92 Cr
    YoY -126.9%
  • PAT Margin
    -76%

9M FY26

  • Operating Revenue
    ₹748 Cr
    YoY +11%
  • EBITDA
    ₹49 Cr
    YoY -32.9%
  • EBITDA Margin
    6.5%
  • Net Loss
    ₹-0.67 Cr
    YoY -102%
  • PAT Margin
    -9%
  • Cash Profit
    ₹22.65 Cr

What they filed

Q1 FY27: revenue up 15.2%, net profit up 402.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue237 223 253 226 271 +15%252 +13%282 +12%260 +15%
EBITDA29 23 19 18 17 −40%13 −41%19 +1%20 +10%
Net profit15 7 1 1 1 −95%-2 −127%4 +181%3 +402%
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

  • Sales Growth Revenue · this year (FY26) · High confidence 8% to 10%
    So, we are looking at anywhere between 8% to 10% growth in sales for this year definitely.

    — Dharmil A. Bodani

Capacity

  • Mahad Optimal Utilization Capacity · a few quarters · Medium confidence optimal utilization
    It is still in the stabilization phase and we have always guided that it would take a few quarters to reach optimal utilization.

    — Shyamal A. Bodani

  • Mahad Independence Capacity · next two quarters · Medium confidence some level of independence
    I think the next two quarters should see Mahad getting into some level of independence, point number one.

    — Management

Export Mix

  • Mahad Export Share Export Mix · High confidence 70%
    Point number two is we are looking at a split of anywhere between 30% local and 70% exports in terms of the 250 tonnes that we have kind of earmarked for this particular plant, which will help us get into the profitable zone.

    — Management

Sales

  • North America Sales Growth Sales · nine months · Medium confidence 6% to 9% more sales
    But I would have said that we would have very easily expected to have a 6% to 9% more sales in these nine months. Had the tariffs not been there or there was clarity in terms of the eventual landed cost for an American customer coming from goods from India and or China.

    — Management

What to watch in Q4 FY26

Mahad plant utilization and profitability contribution

Next two quarters
Current 30-35% utilization, near-term drag on profitability
Target Increased utilization, reduced drag, moving towards independence

Why it matters

Mahad is a key strategic asset, and its stabilization is crucial for consolidated profitability.

Mahad continues its early ramp-up trajectory and remains strategically important. It is still in the stabilization phase and we have always guided that it would take a few quarters to reach optimal utilization.

Risks & concerns

  • Pricing pressure in ingredients market

    high

    Pricing remains under pressure especially in ingredients in what is still a buyer's market, impacting EBITDA moderation.

    Management acknowledged

  • Mahad facility being a drag on profitability

    medium

    Mahad greenfield facility in ramp-up continues to be a near-term drag on consolidated profitability, expected to reduce progressively.

    Management acknowledged

  • Geopolitical confusion and tariffs impacting sales

    medium

    One year lost due to geopolitical confusion, and US tariff situation previously impacted camphor business and American customer buying patterns.

    Management acknowledged

  • Camphor imports affecting margins

    medium

    Camphor import in the country, especially from China, has an effect on margins and profitability.

    Analyst acknowledged

  • Seasonal demand softness in Q3

    low

    Q3 is typically a more normalized quarter with sequential cooling off in camphor and select aroma ingredients/fragrances.

    Management acknowledged

Q&A highlights

2 direct
Camphor Imports, Anti-dumping Duty, and GST Impact Partial
I will definitely respond to your points. First, the camphor which is getting imported in India, what you are saying is absolutely correct because that it is a disturbing instance, point number one. Point number two, if manufacturers are importing then it is a very critical situation. But whatever is being imported from China, normally, we said last time also that natural camphor is being imported rather than synthetic camphor. And that is of a very different quality. And we talked about this but nothing has proceeded so far, and we will focus to improve our process from our internal process optimization.

Analyst raised concerns about unfair competition from camphor imports and GST issues impacting profitability, which management acknowledged but did not provide specific actions on anti-dumping or GST.

Asked by Rajesh Mishra

North America Exposure and Tariff Situation Impact Direct
The last time we checked, between 16% to 20% of our sales are oriented towards America, point number one. Point number two, I think the major impact because of this positive trade deal is if you historically look at the American market, it is driven by having material in inventory. And because of the uncertainty, the American customer was buying hand to mouth. And hence, what used to normally stay at the inventory level was the loss in sales. I think that slowly started opening up because nobody still has the final draft of the tariff reduction program and how it is going to be implemented. But we are seeing positive signs in terms of customers coming back and placing orders, which will definitely have a positive impact on sales.

Management quantified North American sales exposure and explained how tariff uncertainties previously impacted demand, with new trade deals now expected to drive significant sales growth.

Asked by Kaustubh Bubna

EBITDA Reset and Mahad Facility Performance Partial
So, Saket to answer your first question, I think, A, when you are in the generic ingredient space a lot of the actions that you take and a lot of the projected outcomes that you might have, there might be a bit of a gap in terms of achieving them. And unlike some other industries where the outcomes are relatively faster, especially when you look at the chemical industry and when you look at, say, something like Mahad, which was a very large site, which has been taken or acquired with future in the plan, we have ended spending money, which was a little more than what we would have spent if we would have just built the Evermoss plant in some of our other sites, point number one. So, I think if you are going to probably look at a process of and which is what Shyamal mentioned in his speech, that what we are trying to create is a is a sustainable infrastructure, which will continue to churn out products for a long period of time.

Analyst challenged management on lower-than-expected performance and Mahad's drag on profitability, prompting management to reiterate Mahad's long-term strategic importance and the slower nature of returns in the chemical industry.

Asked by Saket

FMCG Initiative and Margin Impact Partial
So, I mean, the FMCG segment of the business continues to stay stronger. We all have to also be mindful that the FMCG part of our business is in camphor, which as a product is very much under pressure in terms of the profitability. Hence, the normal outcome that we should see in that piece of our business, we are unfortunately unable to kind of capitalize on it.

Analyst questioned the effectiveness of the FMCG strategy given declining margins, to which management explained that while the segment is strong, its profitability is currently constrained by the broader camphor market pressures.

Asked by Saket

Mahad Capacity, Utilization, and Future Plans Direct
The Mahad facility or the Mahad site that we have is a 18 acre site. So, we have currently only implemented phase one. But when we had to implement phase one, we had to do the land development for the whole site. And that took up a substantially large chunk of the investment that was done there, point number one. Point number two is we are looking at a split of anywhere between 30% local and 70% exports in terms of the 250 tonnes that we have kind of earmarked for this particular plant, which will help us get into the profitable zone. We already have reached around, I mean, to be very honest, the real production in that plant has only started from June 2025. So, in seven months, we are already seeing that the plant is running at anywhere between 30% to 35% of its capacity.

Analyst sought clarification on Mahad's operational details, capacity, and ramp-up timeline, receiving specific figures on current utilization and future targets for the strategic facility.

Asked by Kaustubh Bubna

2 min read 6 chapters

Detailed narrative

Q3 FY26 Performance Overview

Oriental Aromatics reported Q3 FY26 operating revenue of ₹252.03 crores, marking a 13% year-on-year growth, with sales volumes increasing by 10% YoY. However, the quarter saw a net loss of ₹1.92 crore and an EBITDA margin of 5.26%, down from ₹23 crore in the prior year, primarily due to pricing pressure in the ingredients market and the ongoing stabilization of the Mahad facility. The nine-month period also reflected a net loss of ₹0.67 crore on ₹748 crore revenue, with an EBITDA margin of 6.49%.

Mahad Facility Ramp-up and Challenges

The Mahad greenfield facility, a key strategic asset, commenced real production in June 2025 and is currently operating at 30-35% capacity. Management indicated it would take 'a few quarters to reach optimal utilization' and acknowledged it is a 'near-term drag on consolidated profitability.' They expect the facility to achieve 'some level of independence' in the next two quarters, with a long-term target of 30% local and 70% export for its 250-tonne capacity.

Market Dynamics and Pricing Pressure

The company continues to face a soft pricing environment in aroma ingredients, described as a 'buyer's market,' which contributed to the EBITDA moderation in Q3. While aroma chemical prices are noted to be even lower than 2018 levels, management believes they have internally 'bottomed out.' The Q3 demand mix was also less favorable than Q2 due to seasonal cooling off in categories like camphor.

North American Market and Tariff Impact

Sales to North America constitute 16-20% of the company's total sales. Historically, tariff uncertainties led American customers to buy hand-to-mouth. However, management anticipates a positive impact from recent trade deals, potentially adding 6-9% more sales, as clarity on landed costs and a more stable duty structure (India retaining a 20% advantage over China) encourages renewed buying and stock building.

Strategic Focus and Outlook

Oriental Aromatics is prioritizing volume growth, market share expansion across camphor, fragrances, and specialty aroma ingredients, alongside internal cost and process improvements. The fragrance division shows strong performance, benefiting from softer raw material pricing and new customer wins. The company aims for 8-10% sales growth for FY26 and is confident in its business model, focusing on long-term sustainability and capitalizing on emerging opportunities.

Camphor Business and Imports

The camphor business, including the FMCG segment, faces profitability pressure. Management acknowledged the issue of camphor imports, particularly from China, which affects margins. They noted that natural camphor prices from China have started increasing, aligning with Indian camphor, and the company is focusing on process improvements to enhance profitability. Oriental Aromatics is highlighted as the world's only US FDA, WHO, and GMP certified camphor manufacturer, playing a significant role in the medical pain management space.

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