Oriental Aromatics Posts 174% Net Profit Growth in Q3 FY ’25 | Concall Updates | 2025

Oriental Aromatics Q3Financial Performance

• Revenue Growth: The company reported operating revenue of ₹223 crores for Q3 FY ’25, marking a 13% increase compared to the same period last year.
• EBITDA Improvement: EBITDA for the quarter stood at ₹23 crores, up 60% year-on-year, with an improved EBITDA margin of 10.15%, a 301 basis points increase.
• Net Profit: The company posted a net profit of ₹7 crores, representing a remarkable 174% year-on-year growth. PAT margins were recorded at 3.19%.
• Nine-Month Performance: For the first nine months of FY ’25, operating revenue reached ₹675 crores, reflecting a 9% increase year-on-year. EBITDA was ₹73 crores, a significant 181% rise compared to the previous year. The net profit for this period was ₹33 crores, a sharp turnaround from a net loss of ₹1 crore last year.

Operational Highlights

• Seasonal Impact: Q3 is traditionally a slower period due to the impact of the Indian festival season.
• Growth Despite Challenges: Despite the seasonal slowdown, the company achieved double-digit growth in production, sales, and operating EBITDA compared to Q3 FY ’24.
• Fragrance & Flavor Division: Strong growth was seen in this segment, driven by both existing and new customer acquisitions.
• Fine Fragrances: Increased demand for fine fragrances highlighted a shift in consumer behavior toward daily usage.

Market Dynamics

• FMCG Collaboration: While there was a general slowdown in FMCG demand, Oriental Aromatics sees this as an opportunity to collaborate with FMCG R&D teams to create innovative products.
• Camphor Market: The camphor segment faced tough market conditions, but other terpene-based products continued to see strong demand.
• Backward Integration: The company’s backward integration capabilities provide significant advantages in delivering impactful solutions within the Fragrance & Flavor division.

Regulatory Updates

• U.S. FDA Compliance: The company successfully defended its U.S. FDA certification for camphor during a recent audit, demonstrating adherence to global quality standards.

Input Costs and Market Outlook

• Cost Fluctuations: Mild to moderate impacts are expected from input cost fluctuations.
• Macro Factors: The company is closely monitoring macroeconomic factors such as the depreciation of the Indian rupee and U.S. tariffs.
• Stable Pricing: Most input costs have remained stable, except for pinene, which has seen an increase.

Future Growth Prospects

• Long-Term Optimism: Management remains optimistic about the company’s long-term growth trajectory.
• Operational Efficiency: A strong focus on improving operational efficiencies and market positioning is expected.
• Volume Growth: New product launches and ongoing customer engagement strategies are likely to drive volume growth.
• Growth Confidence: While the management refrained from providing specific volume growth guidance, they expressed confidence in achieving substantial growth.

Expansion Plans

• Production Facilities: Newly commissioned facilities in Vadodara and Mahad are ramping up production.
• Mahad Plant: Currently operating below optimal capacity but expected to positively contribute to EBITDA in upcoming quarters.

Challenges

• Camphor Division: Continued pricing pressure due to market overcapacity is limiting profitability.
• Margin Focus: The management acknowledges the need to consolidate product offerings strategically to enhance margins.

Investor Engagement

• Transparent Communication: The company emphasized continuous communication with investors and reiterated its commitment to transparency regarding growth and operational performance.

FAQs

1. What is the revenue growth for Oriental Aromatics in Q3 FY ’25?

The company reported a 13% year-on-year increase in revenue, amounting to ₹223 crores.

2. How did the Fragrance & Flavor division perform?

This division saw robust growth, driven by both existing and new customer acquisitions.

3. What are the challenges faced by the company?

The camphor division faces pricing pressure due to market overcapacity, which affects profitability.

4. What are the future growth prospects for Oriental Aromatics?

The management is optimistic about long-term growth, focusing on operational efficiencies and customer engagement strategies.

5. How is the company handling input cost fluctuations?

Most input costs are stable, except for pinene, which has seen an increase. The company is closely monitoring macroeconomic factors.

Oriental Aromatics‘ Q3 FY ’25 results show strong growth despite seasonal challenges. With a clear focus on innovation, customer engagement, and operational efficiency, the company is well-positioned for future success. Transparent investor communication and strategic expansion plans further bolster its growth outlook.

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