Earnings Call Transcript
OAL · price
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Oriental Aromatics Limited crossed INR 1,000 crore revenue milestone in FY'26 with consolidated revenue of INR 1,030.8 crore, an 11% year-on-year growth from INR 928 crore. However, profitability saw significant compression with EBITDA margins dropping to 6.6% from 10.06% in FY'25, and PAT falling to just INR 3.3 crore from INR 34.3 crore. Management attributed this to a 'triple shock' of rising raw material costs (gum turpentine, CST, alpha-pinene at all-time highs), crude oil volatility, and rupee depreciation. The Mahad facility continues to drag margins by 1-1.5% but is expected to become EBITDA neutral within one year at 75-80% utilization. The company recommended a dividend of INR 0.50 per share. Management aims to return to ~10% EBITDA margins through internal efficiency programs and cost optimization.
The stock faces near-term margin pressure due to input cost inflation and Mahad ramp-up costs, though crossing the INR 1,000 crore revenue milestone demonstrates operational scale. A return to double-digit margins may take a few quarters as raw material headwinds persist and the company prioritizes consolidation over aggressive expansion.