Oriental Aromatics Limited — Investor Meet, 19-11-2024: Analysts/Institutional Investor Meet/Con. Call Updates

**Financial Performance:** Oriental Aromatics reported an operating revenue of INR 237 crores for the quarter, reflecting a 4% year-on-year increase. EBITDA surged to INR 29 crores, up 160% year-on-year, resulting in an EBITDA margin of 12.08%. Net profit climbed to INR 15 crores, a significant improvement of over 500% compared to the previous year. For the first half of FY25, total revenue was INR 453 crores, a 7% year-on-year growth, while EBITDA stood at INR 51 crores, highlighting over 300% growth year-on-year. PAT for the period reached INR 26 crores, marking a recovery from a loss of INR 4 crores in H1 FY24.

**Future Outlook and Growth Drivers:** Management remains optimistic about growth with continuous demand across all sectors. The Specialty Aroma Ingredients Division is expected to thrive with strong sales forecasts and new product developments. The recent commissioning of the hydrogenation plant in Vadodara and a new facility in Mahad for a specialty aroma ingredient, Evermoss, are set to drive significant revenue growth.

**Order Book and Operational Updates:** The company’s order book looks robust with positive interest in hydrogenation products from global distributors. The Mahad facility has started production and is anticipated to contribute significantly to revenues.

**Analyst Q&A Insights:** Analysts questioned the sustainability of current margin levels and the future of camphor pricing amidst competition. Management acknowledged ongoing price pressures but maintained a guidance range for EBITDA margins between 10-12%. Demand was affirmed to be stable across all verticals, with expectations of healthy growth amid recovery in customer orders. Analysts also clarified future revenue potentials from expansions, with estimates suggesting additional INR 250-300 crores in top-line growth.

**Market or Regulatory Updates:** The prevailing demand environment appears stable with no significant regulatory impacts noted, maintaining a focus on growth in exports and local markets.

**Strategic Focus Areas:** The company displayed a strategy centered around production capacity expansions, customer acquisition, and innovative product offerings. This diversification is indicative of management's confidence in balancing risks across different verticals.

**Investor Insight:** Given the strong financial health, growth potential through strategic expansions, and a positive demand outlook, the sentiment aligns with a ‘buy’ position as the company appears well-positioned to leverage its growth strategies effectively.