Operational Highlights
- The quarter was challenging due to high input costs
- Revenue from operation stood at ₹205.8 Cr degrowth of (10.7%) QoQ and 7.9% growth YoY
- EBITDA margins at 7.87% compared to 8.59% in previous quarter
- Strong demand witnessed across all product categories, resulting in a better top line growth compared to the same period last year
- Revenues were down due to planned shutdown of camphor (Bareilly) plant
- Production numbers and sales numbers at all plants crossed pre-Covid levels for a 9-month period
- Camphor is sold in the spot market whereas in aroma chemicals 75% are on contractual basis and the rest 25% are on spot basis. F&F segment is not into spot selling
- Growth in F&F industry is driven from Middle Eastern region
- Strong demand across all segments
- Higher number of aroma ingredients results in cross selling to other aroma ingredient players
- Higher competition is faced on F&F client acquisition compared to aroma ingredients side
Margins
- Shutdown at Bareilly plant impacted margins
- Margin and profitability pressure continued due to significant increases across all input costs
- The company has successfully passed on these price increases to most customers and expects margin recovery in coming quarters.
- Realisations for finished products have also increased as compared to pre-Covid levels
- Guidance of 16-17% EBITDA margins sustainable.
Capex update
- Successful commissioning of the dedicated specialty aroma ingredient plant at Vadodara and the validation process is continuing as scheduled.
- Commercial shipments from this plant have started and the material has been well accepted by the customers
- The company has also successfully completed the capacity expansion project in Bareilly plant increasing capacity of one of the products by almost 70% through process re-engineering. Validation process for this expansion will continue in Q4 and top line contribution of this expansion will happen in FY23.
- The hydrogenation plant is in line with the schedule and will come online by Q4FY23
- Mahad capex will come online next year