Oriental Aromat.

Oriental Aromatics Limited achieved a significant milestone in FY26, with consolidated revenue from operations crossing the INR 1,000 crore mark for the first time, reaching INR 1,030 crores. This represents an 11% year-on-year growth compared to INR 928 crores in the previous year. Despite this top-line growth, the year was challenging, with EBITDA margins compressing to 6.60% from 10.06% in FY25, and PAT margins falling to 0.32% from 3.7% in FY25.

In Q4 FY26, the company reported an operating revenue of INR 282 crore, showing a healthy 12% quarter-on-quarter and 11% year-on-year growth. Total sales volume increased by 16% compared to Q3 FY26 and registered a 5% growth on a year-on-year basis. However, total production volume declined by 7% QoQ and 14% YoY, primarily due to product mix changes and trial runs in the Specialty Chemicals division.

The compression in EBITDA margins was attributed to a combination of factors: pricing pressure on the ingredient side, raw material cost inflation (Gum turpentine, CST, alpha-pinene at all-time highs), and substantial Indian rupee depreciation impacting import costs across all three divisions. Additionally, the Mahad plant's ramp-up phase continued to be a drag, impacting consolidated EBITDA margins by 1% to 1.5%.

The Mahad facility has shown positive product acceptance, with sampling cycles completed and commercial shipments commenced. Management expects the plant to achieve 75% to 80% utilization within the next year, at which point it should become EBITDA neutral and start contributing positively. The initial investment for the plant was around INR 60-65 crores, with an additional INR 20-27 crores for utility base, and capacity can be doubled with a further INR 12-15 crores CAPEX.

The Camphor and Terpene Chemicals division operated at healthy utilization levels. While Q4 is seasonally softer, the Indian camphor market faces oversupply due to substantial domestic capacity additions. Management noted that overcapacity in India is a bigger challenge than natural camphor imports from China, and they are exploring opportunities to ensure growth in this segment.

The broader market remains a buyer's market globally, leading to subdued end-product pricing. Despite significant increases in input costs (25-27%), customer resistance has necessitated breaking price increases into incremental, three-month adjustments. For spot materials, a new price list is issued monthly to ensure immediate pass-through of cost changes.

The company maintains a comfortable leverage position with a net debt-equity ratio of 0.58x as of March 31, 2026. The Board recommended a final dividend of INR 0.50 per equity share for FY26, subject to shareholder approval. Management emphasized a consolidation mode, focusing on extracting maximum benefits from existing investments and preserving profit, while remaining open to expansion ideas.