Summary
Oriental Aromatics Limited - Q3 FY26 Earnings Call Summary Friday, February 13, 2026 01.00 p.m.
Event Participants
Executives 5 Dharmil A. Bodani (Chairman & Managing Director), Girish Khandelwal (Chief Financial Officer), Kiranpreet Gill (Company Secretary), Parag Satoskar (Chief Executive Officer), Shyamal A. Bodani (Executive Director)
Analysts 5 Jai Jain (Individual Investor), Kaustubh Bubna (BMSPL), Manaswi Gupta (Individual Investor), Rajesh Mishra (Liberty Securities), Rohit Kumar (Individual Investor), Saket (Sagari Capital)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue from Operations | ₹252.03 crores | +13% YoY; sequentially softer due to post-festive normalization and seasonal cooling in camphor. |
| EBITDA | ₹13.25 crores | -42.4% YoY; margins impacted by pricing pressure in ingredients and Mahad ramp-up costs. |
| EBITDA Margin | 5.26% | -490 bps YoY; reflects a buyer’s market and fixed cost under-absorption at the new Mahad facility. |
| Net Profit / (Loss) | (₹1.92 crores) | Down from ₹7.14 crore profit YoY; impacted by lower operating margins and interest/depreciation. |
| Sales Volume | 10% Growth | YoY growth for Q3; 9M FY26 also shows 10% volume growth despite pricing headwinds. |
| Production Volume | 3% Growth | YoY growth for Q3; 9M FY26 production up 11% YoY, indicating high capacity utilization. |
| Net Debt-to-Equity | 0.65x | Maintained as of Dec 31, 2025; provides cushion for managing volatility and funding growth. |
Geographic & Segment Commentary
- Fragrance Division (Ambernath): Sales increased 4% YoY. The segment benefits from softer raw material pricing and new customer wins, though it saw typical sequential softening post-festive season.
- Aroma Ingredients (Baroda): Production grew 15% YoY despite a highly competitive and price-sensitive specialty ingredients market. Management noted the market remains “crowded” but the company is maintaining its focus on market share.
- Camphor & Terpenes (Bareilly): Sales volumes rose 27% YoY. However, the segment faced sequential volume declines consistent with seasonal patterns and continues to face pricing pressure from Chinese imports and domestic capacity increases.
- North America: Exports represent 16-20% of total sales. Performance was previously hampered by tariff uncertainties, causing customers to buy “hand-to-mouth,” but management expects a rebound following recent trade deal developments.
Company-Specific & Strategic Commentary
- Mahad Plant Ramp-up: The Phase 1 greenfield facility is currently at 30-35% utilization since starting production in June 2025. It remains a near-term drag on profitability due to high fixed costs but is expected to reach independence in the next two quarters as global customer approvals finalize.
- Process Optimization: To counter soft global pricing, the company is executing internal cost programs and process improvements to rebuild margins structurally, independent of the pricing cycle.
- Product Positioning: OAL remains the world’s only US FDA-approved camphor manufacturer, positioning it strongly for the global medical and pain management markets.
- Strategic Scale: Management emphasized moving from “quarter-to-quarter noise” to long-term sustainability, noting that the current asset base is now largely on the ground and ready for capacity filling.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Growth | 8% to 10% for FY26 | Based on strong volume growth trends and a solid order book for H1 2026. |
| Mahad Utilization | Progressive increase | 250 tonnes production earmarked for profitability; 30/70 domestic-export split targeted. |
| Pricing Power | Bottoming out | Management believes aroma chemical prices have bottomed out and expect realizations to improve as raw material cycles turn. |
Risks & Constraints
| Risk | Context |
|---|---|
| Pricing Pressure | Aroma ingredient and camphor prices remain under pressure due to global oversupply and domestic capacity increases, leading to a “buyer’s market.” |
| Chinese Imports | Cheap natural camphor imports from China and local sales without GST are impacting domestic profitability and market dynamics. |
| Geopolitical/Tariffs | While recent trade deals are positive, previous uncertainty led to inventory liquidations in North America and redirected global supply to Europe, saturating that market. |
| Mahad Stabilization | As a greenfield site, the overheads and land development costs are currently weighing on consolidated margins until utilization exceeds 50-60%. |
Q&A Highlights
Tariffs and North American Market
- Question: What has been the impact of US tariff uncertainty and the outlook following the new trade deal? (Kaustubh Bubna)
- Answer: OAL lost an estimated 6-9% in sales due to buyers avoiding stock-building amidst tariff uncertainty. The new trade deal, which reduces duties from 28% toward 18%, restores India’s competitive edge over China (14% duty difference) and is expected to drive restocking. (Parag Satoskar & Dharmil Bodani)
Camphor Competition & Imports
- Question: What steps are being taken against camphor dumping from China and GST-evaded local sales? (Rajesh Mishra)
- Answer: While imports of natural camphor from China were high, they have trended lower recently as Chinese prices align with Indian levels. OAL is focusing on internal process optimization and its US FDA/WHO-GMP certifications to differentiate in high-value medical segments. (Management)
Mahad Facility Performance
- Question: Why are losses mounting at Mahad and when will it stabilize? (Saket)
- Answer: The site is 18 acres and required heavy initial investment in land development for future phases. Sales only started in June 2025, and there is a 6-month lag between sampling and commercial approval. Utilization is currently 30-35% and expected to improve significantly over the next two quarters. (Parag Satoskar)
FMCG Strategy
- Question: Is the FMCG/Branded Camphor (3-Pine) strategy working given the downward margin trajectory? (Saket)
- Answer: The company is currently in “sales maximization and customer retention” mode. While branded camphor is under pricing pressure, the infrastructure is built and OAL is waiting for the pricing cycle to turn to capitalize on the asset base. (Management)
Key Takeaway
Oriental Aromatics reported a resilient volume performance in Q3 FY26 with 10% YoY sales growth, despite a challenging pricing environment that led to a net loss of ₹1.92 crores. The bottom line was primarily pressured by the ongoing stabilization of the Mahad greenfield facility and a seasonal softening in the camphor and fragrance segments. Strategically, the company has completed its asset-creation phase and is now focused on ramping up utilization at Mahad, which is targeted for a 30% domestic and 70% export mix. Management is cautiously optimistic, guiding for 8-10% full-year revenue growth underpinned by a recovery in the North American market following favorable trade developments and the bottoming out of global aroma chemical prices. While pricing volatility and competitive imports remain immediate watch points, the company expects the operational drag from Mahad to reduce progressively as fixed cost absorption improves over the coming two quarters.
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