CAMLINFINE - Camlin Fine Sciences Ltd Share Price

Management provided an optimistic outlook regarding future performance, especially in the Vanillin segment. For fiscal year 2027 (FY'27), the company anticipates a total sales volume of 4,000 metric tons of Vanillin, a significant increase from the 1,740 metric tons sold in the first nine months of FY'26. They expect Vanillin realizations to improve to around $14-$14.5 per kg, which is reflective of a 25% tariff reduction.

In terms of financial performance, management projected that overall revenue for the company would reach approximately Rs.2,200 crores in FY'27 and further increase to Rs.2,400 crores in FY'28. They projected EBITDA margins to improve between 12% to 14%, driven by enhanced sales volumes and realizations in the Vanillin segment along with 20%-25% growth in the Blends business.

Key forward-looking points emphasized include:

1. A 25% reduction in tariffs is expected to boost Vanillin realizations significantly, allowing for improved margins.
2. The integration of acquisitions like Vinpai is expected to positively influence revenue growth, where the company anticipates up to 50% growth in the blended business segments next year.
3. The immediate focus is on minimizing losses from a recent fire incident at the Brazil facility, where stock worth approximately Rs.28 crores was lost. While they are adequately insured, there may be temporary margin impacts due to local sourcing needed to fulfill orders.
4. An anticipated clean-up from the liquidation processes in Europe could stabilize costs and halt ongoing cash burns.

Overall, management seems confident in maintaining growth trajectories while managing transitioning challenges.

1. Question from Hrushikesh Shah: "Sir, my first question is currently our Vanillin realization at $12, right? And you mentioned that they may increase by $2 to $3. So, according to me, let's say your realization in the US is $18. If your tariffs move down by 25%, then your realization should increase by $6. So, where is the disconnect in this?"
Answer: The price in the US is around $18-$19, which is correct. However, we had to pay 50% duty to realize $12. With the duty reduced to 25%, our realization will improve to about $14-$14.5. This adjustment accounts for local competition without the duty.

2. Question from Hrushikesh Shah: "What is the volume guidance for FY'27?"
Answer: For FY'27, we expect total Vanillin sales, including methyl and ethyl, to be around 4,000 metric tons.

3. Question from Hrushikesh Shah: "What was the revenue for Vinpai for the full year?"
Answer: Vinpai's consolidated revenue has been around Rs. 13 crores monthly, so the annual turnover is approximately Rs. 150 crores.

4. Question from Hrushikesh Shah: "What do you think is our steady-state margin?"
Answer: Our steady-state gross margin should improve to 46%-47% in FY'27 due to increased Vanillin realizations and growth in the blends business. The EBITDA margin is expected to range between 12%-14%.

5. Question from Satish Kumar: "What is the duty right now in the US?"
Answer: The current duty is 25%. Once the trade deal is finalized, we expect this to drop to 18%.

6. Question from Satish Kumar: "What was the quantity of Vanillin we did not sell this quarter?"
Answer: We opted to delay the sale of about 200 tons to benefit from the lower duty in the next quarter, aiming for a better realization.

7. Question from Surya Narayan Patra: "Will Vanillin pricing in the US affect Europe too post-tariff?"
Answer: No, there will be a disparity. The anti-dumping duties in Europe are much higher, meaning pricing dynamics will remain different between the US and Europe.

8. Question from Surya Narayan Patra: "What is the impact of the Brazilian fire incident?"
Answer: While the blending unit is temporarily closed, the incident will not significantly impact our top-line revenue. However, we may face margin pressure short-term due to local sourcing.

9. Question from Rehan: "What would be the margin profile at EBITDA level for Vinpai and the other acquisitions?"
Answer: Vinpai is currently near breakeven with minimal EBITDA contribution, while Vitafor is stable with margins around 4%-12%.

10. Question from Rohan Advant: "What is the revenue guidance for '27 and '28?"
Answer: We are targeting around Rs. 2,200 crores for FY'27, growing to approximately Rs. 2,400 crores in FY'28, assuming current product pricing remains steady.