Ladies and gentlemen, good day and welcome to Q4 and FY2025 Earnings Conference Call of Camlin Fine Sciences Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchstone phone. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations the company has on the date of this call. These statements are not the guarantees of future performance and involve the risks and uncertainties that are difficult to predict. I now hand the conference over to Mr. Ashish Dandekar, Chairman and Managing Director of Camlin Fine Sciences Limited. Thank you, and over to you, sir.
Thank you. Ladies and gentlemen, welcome to our quarterly call. We are sorry and we apologize for the delay in the call. It was due to technical issues with uploading the results, and I'm sure you'll appreciate that we would like to give you more time to study them. As always, Santosh Parab, our CFO, will give you a brief of the quarter and the performance and issues, after which Nirmal Momaya, Managing Director, will be answering your questions along with Santosh. Santosh?
Thanks, Ashish. Good evening, everybody. Thanks for attending our earnings call. As you're aware, the times are quite difficult. General global situation on tariffs and war and all these things has been a very difficult time. Still, we have been able to give fairly good results. I'll just tie down to the consolidated results. As you would have seen from our disclosures, as you know, we had two units which were not the business was closed or the manufacturing was stopped in our Diphenol unit in Europe and our ethyl Vanillin Manufacturing unit in China. These both have had stopped two years back, and the board has decided to discontinue or abandon this business. Hence, as per the Indian Accounting Guidelines, we have segregated our results into two. One of our core business or what we call technically as a continuing operations and a discontinued operation.
The discontinued operations which have been presented in the results pertain to those of two abandoned or closed down units where we feel that the production is economically unviable and there is a remote chance of reviving those two projects. As you are aware, the adequate provision on both these assets was done in September, and we had impaired the entire value of both the plants in the September quarter. As per the accounting guidelines, these results have been segregated into continued and discontinued, and all the impact also of the earlier quarters has been regrouped and disclosed as per the accounting guidelines. Now, coming to the operating part of the business, in the current quarter, we have total turnover of INR 437 crore as against INR 431 crore in the last quarter. On an annualized basis, we had INR 1,439 crore, which has now increased to INR 1,666 crore.
This has been largely though the prices of all the products have been southbound, but we have been able to hold on to our volumes. In fact, grow in some of the sectors like our blend business, we have grown. The vanillin business is what has started growing. It has been steadily ramped up, and as compared to the last year, we had a much, much better result on vanillin business. The total growth, what we have seen in revenues on an annual basis or continuing or the core business has grown by almost 15% year- on- year. We also had an improved EBITDA of core business of around 12.5%. That is around INR 208 crore in 2025 as compared to INR 184 crore of the comparable business in the last year.
We have been able to maintain our margin on the core business despite the main products' prices have been a bit southbound. We have healthy growth in blends, especially in the North American market, as well as exciting growth in India. Of course, our stabilized business in Mexico has been increasing at a very high pace. Overall, the blend business has grown by around 17%-18% year- on- year. We have reached around INR 878 crore as compared to INR 747 crore in the last year. Of course, blend business also includes CFS Vitafor, the new blend business which we bought in Europe, Belgium, in our first quarter of this year. It is a nine-month thing, but it also clicked around INR 85 crore in this year, and we feel that it will have higher momentum as we go ahead. The main feather in the cap has been Aroma.
We have continued our momentum of growth in this quarter. The total contribution of revenue from Aroma has been around INR 176 crore in FY2025. This ramp-up will come or increase in the subsequent quarters with anti-dumping duty action in the U.S. You would be aware now that the European Union has levied a preliminary duty of 131%, and that will be finalized in the next few months. That augurs well for us because, obviously, the prices will go up. There has been, of course, the question is that what will be the cash burn on the discontinued business? We are confident that these cash burns will be reducing because we have abandoned the plant, and since we are not going to restart it in a foreseeable future, we will be reducing substantially this cost.
We would be also looking at how to reduce this cost further, and we feel that this cash burn will reduce substantially. Something on the balance sheet, you know that our equity has increased because we had a successful rights issue in January 2025. We have been able to control the overall debt position. The net debt position has improved from INR 564 crore- INR 592 crore. Things augur well for us. We feel that the growth momentum will continue in the future with stabilization of business, the tariff war, and the difficult times, more clarity coming. We can have a better understanding of the future. Thanks so much.
Yes, sir. Should we begin the Q&A session?
Yeah, you can.
Yes. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Rohan Mehta from Ficom Family Office. Please go ahead.
Hello, sir. Thank you so much for the opportunity. Am I audible?
Yes. Yes, sir, you are.
Okay. Perfect. Firstly, could you share the volume of vanillin exports to the U.S., specifically for the month of March and April? Secondly, what is your understanding of the recent ADD and CVD duties imposed on Chinese producers? Will these be applicable for a fixed period of five years, or is it structured as three years with an option to extend by two years?
Sharing of specific data to U.S. is not possible because it's very competitor-sensitive data. Overall growth has been there. You can see from the volumes, the amount of revenues which we have disclosed in our investor call. April, certainly not. It's clearly a foward-looking statement. We cannot share that numbers. Maybe you can add on the ADD.
The ADD is for typically for five years.
Okay. Okay. Perfect. Also, on the prices for Europe and USA for vanillin, what is the current difference?
Sorry? What is the current d ifference between Europe and USA?
What is the difference in the vanillin price?
Yeah. The vanillin price, the difference will be about 20%, so 20%-25% because the ADDs are different between what is in Europe and what is in the U.S.
U.S. is higher, right, to you?
That's right.
What is the number for U.S. currently as on date?
No. I mean, I can't give you specific numbers. The range I can tell you is in the range of $15.
In the range of $15. Got it. Got it. In terms of your utilization for the vanillin plant, where do you see the capacity utilization, let's say, in the next two years?
In the next two years, we want to take it up to 100% as the market development gets better. The idea is to take it to 100% in the next two years.
Right. What is it today, sir, as on date?
As on date, we'll be at about 45%-50%.
45-50%. Got it. Got it. Lastly, sir, what is the outlook on the blend business going forward? Do you see at what run rate on an EBITDA basis do you see this business at?
Potentially, we should grow that blend business by about 20% going forward in the next two to three years. The EBITDA margins will improve in some of the geographies because we hit a certain threshold. It will be in the high teens EBITDA margin.
Okay. Okay. What is it currently as a percentage of revenue? What would it be in the next two years, the blend business, given the vanillin capacity utilization, let's say, is at 100%?
As you said, we don't know what will be the future prices. We know that our capacity is 6,000 tons, and we can calculate that number. As far as blend is concerned, we are at INR 878 crore currently. We are at 20% CAGR for the next two years. That also is numbers can be calculated. As you said, these are high-teens business and have been assured. They move towards 20%.
Very interesting. Got it. Got it. Lastly, sir, any pricing pressure are you facing on any products at the moment?
Yeah. There's pricing pressure on all products.
Except vanillin.
Except vanillin right now in two markets. Otherwise, there's a lot of pricing pressure coming from competition from China.
Okay. Okay. In terms of vanillin, any inventory restocking issues you're facing?
We did not get the question. Can you repeat it?
In the vanillin business, when it comes to the inventory, any destocking issues are you facing? Are you under pressure, any inventory pressure over there? Since earlier customers, they had built up inventory at.
Yeah. Yeah. That will take a few months for the destocking to happen. That's part of the reason why we said it takes more than a year to ramp up to 100%.
Sure. Thank you so much for the clarifications. I'll be back in the queue.
Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Jatin Sangwan from Burman Capital. Please go ahead.
Thanks for taking my question. One thing I've observed is vanillin sales have not picked up Q-o-Q. Is there any reason for that?
As you know, we have been selling in the U.S. So there's a stock on sea. That's one thing. We also control the sales because we are looking that the prices will increase. So it doesn't matter to wait for a couple of quarters to get a $15 realization and a $12 current realization.
Sure. Got it. You mentioned that vanillin price in U.S. is in the range of $15, so Europe would be around $12. When will this price reflect in our realization? What I want to understand is how long is our order cycle?
It starts reflecting in the next few months.
Next few months. What was the average utilization in Q4 FY2025 for vanillin?
The average utilization? Capacity utilization, you are asking?
No, no. Average realization in Q4 FY2025 for vanillin. So you reported sales of around INR 60 crore for vanillin. What was the average sell price for vanillin in Q4 FY2025?
Price has been increasing. It's in the range, so it should be in the range of $12-$13.
$12.
Okay. $12 to $13. And also, you mentioned that capacity utilization of vanillin is 45-50%. So was that for Q4 FY2025 or Q1 FY2026?
Q4 FY2025.
How has been your Q1 doing?
Tell you, this is really a forward-looking statement, but I think, as I said, that we'll be growing.
Hello?
Okay. Sure.
Yeah. Yeah. Also, if I look at your Europe losses and China losses, they have also increased Q-on-Q. I wanted to understand, if you are reporting INR 22 crore-INR 23 crore of discontinued losses, what will be the breakup of those losses? How much are related to employees and how much are other fixed expenses? When will we actually start seeing the reduction in these losses?
As you said, because the decision of abandonment was taken, we had to really clean up the plants and other things. There are some one-time losses and expenses which we incurred in this quarter. These are not regular. Around INR 14 crore of that is non-routine. We will be reducing the employee cost. The employee cost is a major portion in this. Annual employee cost for Europe was INR 16 crore, which is going to reduce in the next financial year by at least 90%.
Got it. If I caught you right, you were saying that you will only see INR 8 crore of discontinued losses in Q1 FY2026?
Yes. Cash burn should not be more than it. Going forward on employee cost, there could be some fixed costs to be incurred because the plant is abandoned, but we are mothballing it. There could be some janitorial cost and security cost, site cost.
Yeah. Okay. Got it. Also, I mean, we have been discussing this for the last few calls. The cost of production of vanillin is still $9, or has it moved in either direction?
As we told you that because the average utilization is at 45%, that's the reason why it is high. As we go beyond 70-75% of breakeven, this should come down to sub-$9.
Okay. Got it. Also, if I look at your, let's say, year-on-year expenses, employee expenses have jumped by around 25%. What has led to this?
One thing is that we added Vitafor in this year, which was not there in the last corresponding quarter. That is one thing. Generally, a lot of businesses in America, Europe, where the annual salary cycle is calendar year, so generally, the costs go up on salary, normal salary rise. Of course, we are also bracing up for additional people on sales side. We are anticipating growth.
For the growth?
Growth. We are anticipating growth in almost all sectors. We are also bracing up. I have sales and technical people on board.
Got it. If I look at your depreciation expenses, it has jumped up sharply Q-o-Q. You have not done any CapEx or anything. What is driving this?
These are the big regrouping which happened, and Vitafor also came, which was not there year-on-year, is the main reason Vitafor chipping in this year. We also had a couple of lease asset business accounting things. Once you get the full annual balance sheet, you will see that there are certain lease assets. To save on cash, rather than going for purchase of assets, we have gone for lease of assets. As you know, the disclosure is in Finance Proc and depreciation on this, and that is increased. It will be more clear when we publish our annual account.
Sure. Got it. That was the last question from my end.
Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star and one. The next question is from the line of Surya Narayan from Philip Capital. Please go ahead.
Yeah. Thanks for the opportunity, sir. My first question is on the possible implication of the tariffs, although that is not very clear. If you can send something or you would be having communication with your clients, and since you are also having the global operation, what possible implication can that throw?
It's very difficult to answer that question, Surya, because everything keeps moving every day. Who knows what tariff will come on which product in which country? It's very, very difficult, really, to project what will happen. All we know is that, hopefully, at least for India, we should not be worse off than our main competitors, competing countries like China. In that sense, either it will be on equal grounds or we may have some advantage.
Okay. And generally, also, there is a large list of products which are exempted from the tariff and all by the U.S. And many of the kind of food-oriented chemicals, which would be like for us, the spades and all that, the blend salts, so possibly. So that is free from tariffs, and hence, there would be no impact. So that is the right way to think, or how is it, sir?
Yeah. Some of the spades, yes, that is right. We do not sell much spades into the U.S. on our antioxidants from India. Really speaking, it does not make much of a difference or any significant material difference. Most of our business is supplied from other places. That is how those tariffs, even though there are no tariffs, are not going to really give us any impact.
Okay. Second question about the blend business. This quarter, generally, Q-o-Q, if I see, then there is a kind of declining trend that we are witnessing. Generally, the perception was that the fourth quarter being the best quarter in terms of the revenue, at least for the company. That is in the trend. Is it not the trend for the blend business? Or are there specific things that have resulted in a quarterly decline?
The blend business essentially is also the Q4 is always slightly muted purely because in some parts of the world where we have substantial business, mostly in Latin and Central America, it is a holiday, extended holiday season. The businesses come back to work post mid-January. You are essentially restricted to a two-month kind of scenario. There are some seasonal things also which impact, like fishing season in some parts of the world where we have business which got delayed. Instead of you seeing business in February and March, you see it in April, May because the fishing season got delayed. There are some climatic conditions which lead to some cyclicality based on not necessarily the time, but on climatic conditions.
Okay. Generally, we have been talking about slightly higher growth, 25%+ for this. Now, obviously, we have seen a very strong base also, hence possibly moderated a bit our guidance of 20%. On top of that, if you can give some clarity about how integrated benefit that you would like to see on the blend business led by the Vitafor acquisition and the potential acquisition of Vinpai and all those contributing, how would that be contributing to this going ahead if you can give some sense for the next year?
Yeah. So we've not actually considered in the 20% growth, Vinpai. If we get, once that is completed, I mean, so we probably will end up at a 25% number that we guided in the past. It's, of course, subject to when the Vinpai closes. There is very good interest in products from both Vitafor and Vinpai across the geographies where we have our own selling and distribution set up. Of course, the other parts of the world, we have distributors which we are expanding relationships with distributors on a global level. You will see a lot of movement coming from not only the areas that we ourselves are present in, but also other parts of the world.
I think both the lines that we've got, Vinpai more and that's more in the food segment and Vitafor in the animal nutrition segment, both are, I think, very well positioned for growth here.
Okay. What is the update in terms of the timeline for the Vinpai acquisition, sir? Also, whether Vinpai would be more influential to growth compared to Vitafor?
I think the regulatory procedures, I think the corporate actions and all that required to be done should be completed in the next two months. That should be done by July. In terms of growth potential, yes, Vinpai does have a fantastic growth potential because the categories of products that they are in are substantial categories. With some differentiated technology, it's well positioned to get some market share.
Sure, sir. Just on the gross margin front, although in the second half of FY2025, we have seen we have crossed the 50% mark, almost like after two years of a gap. Is it purely led by the incremental revenue coming from the Aroma and no benefit of, let's say, corrected the input prices and the initial sign of rising prices? What happens then where that we can target with the ramp-up also that is likely to happen on the vanillin front? What gross margin scenario should we really anticipate?
When you look at it, we lose money on Catechol. As soon as we convert it to vanillin, there is a swing in gross margin. That swing in gross margin will continue to happen on one side. On the other side, there are several products where we are seeing a lot of price pressure and a lot of competition, very aggressive competition. When you balance it, you kind of say that it will be in the region of 45-55%. In that zone, you end up based on product make, based on how the market is behaving. That's the region where we are essentially playing on.
Okay. Okay. One more point, just with your permission. See, on the vanillin side, obviously, the finalization of the ADD is likely to happen by July. By now, you would be having, in some sense, in terms of the placement, order booking, and all that. Is it practical to place, apart from Solvay, is it you that is actively pursuing these contract negotiations and all that with the U.S. parties? What is the scene and feel about the volume visibility for the subsequent period, if you can provide something on the vanillin side?
Yeah. Essentially, in the vanillin business in the U.S. and in Europe now, also the anti-dumping duty has been 131% has been proposed, which will get confirmed in the next month or two. Essentially, that kind of gives Solvay and us some advantage. I suppose we'll get majority of the share of the market between Solvay being the market leader and us being a second player. We will see volume growing from these two markets in the next three to four quarters. You'll see the growth coming in.
Any other third players that is likely such in your sense?
At the moment, there is nobody, but we don't know, I mean, if somebody is in the anvil, but not that we've heard of.
Okay. Just last point, sir, if you can share some of your investment and CapEx plan, if any, for the next year.
Right now, we are not looking at any significant CapEx because we need to first also set our vanillin plant. No significant CapEx, just maintenance and some more debottlenecking and that kind of.
Okay. Sure. Yeah. Thank you, sir. Wish you all the best.
Thanks.
Thank you. The next question is from the line of Ajit Sanjay from Nirzar Enterprises. Please go ahead.
Hello. Am I audible, sir?
Yes. Yes, sir, you are.
Hi, sir. Thanks for the opportunity. Most of my questions have been answered, but one clarification I wanted, sir, about Lockheed Martin business. Do we have any orders or any updates on that, sir?
No, nothing on update about Lockheed right now. It's on, they've installed their first battery. They're waiting for some feedback. No, no orders at this point in time.
Any timeline for that or anything sort of that?
No, very difficult to say. It's not really in our hands. The hands of Lockheed, so.
Okay. Done, sir. Thank you so much.
Thanks.
Thank you. The next question is from the line of Niraj from White Pine Investment. Please go ahead.
Yeah. On the tariff side, can you give some thoughts on how you see the evolution happening? Do you see the margin compression happening? How are our products based on competitiveness? Do you see the margins compressing in non-U.S. areas? Some thoughts on yours would be useful.
Is this question in respect to vanillin?
No, across non-vanillin, sir. Because vanillin, we are clear that the U.S. and Europe will benefit because of the anti-dumping and others may, other side, the prices may go down. Can you talk about the blend side business, the margins, and how much impact, do you see any impact because of the tariff on the competition pressure in the anything because of the tariff side, anything?
The tariff, essentially, I mentioned earlier that very difficult to predict what will happen. At this point of time, we do not see it as a disadvantage or an advantage. The way our view is that the tariffs over a period of time will kind of balance out. I do not think any country will have significant advantage or disadvantage. From that perspective, it seems like we should be okay on our margins as far as the blend business is concerned.
Okay. Second question is, is the inventory in the U.S. so high that it will take a year for you to scale up the production?
Regarding what? Sorry, I didn't follow your question.
The vanillin inventory, you're saying there's inventory in the U.S. because of the pre-buying before the anti-dumping. Is the inventory quite large in the U.S. that it will take a year for scaling up your production of vanillin?
It's difficult to say. It's very difficult to say how much stocking has been done. I mean, what we are seeing is that.
Sir, I'll tell you. See, we can't really estimate what kind of vanillin stocking has happened in the U.S. and how much anybody's carrying. We could certainly see that there is some release of stock and hence our sales in the U.S. are growing. That's why we are saying that it's just ramping up the production to 100% in the first year. It may be detrimental even to the prices. We feel that with respect to our capacity, we will be reaching 100% over a period of the next two years.
Okay. What is the price of booking vanillin right now? Not in the Q4 numbers. What is the price of booking vanillin right now?
To manufacturing vanillin, right?
What is?
No, no. I'm asking something. What I'm asking is, what is the price that you are doing an agreement to sell the vanillin so that the?
It depends on market to market and customer to customer on what you're doing.
An average. An average number.
We told you the range.
But we can't give you figures from this quarter yet.
1$3-$15 is the range. As we said also that we had around a range of $12-$13 in the Q4. At present, the range is $13-$15. It's based on the volume, country, how much quantity you want. So it's very specific. So 10 kg can be sold at $25.
No, I understand that. The last question, what is the estimate of your 6,000 tons if you do the 100% utilization in two, three quarters from now? What is the estimate of that? How much will you be able to sell in the U.S. and the European market?
What is the share of the European and American market?
They're almost the same size.
Both are same size?
Same size market.
No, no. I'm asking what of the total, say, 6,000 tons you produce and sell, say, a year from now, when you reach 100% utilization, how much do you estimate that combined U.S. and Europe you will be able to sell to them? What I'm trying to gauge is how much percentage of your sale volume will come from anti-dumping markets, anti-dumping retail markets?
Our estimate is about 70% should go into those markets. 30% is in other markets.
Okay. Great. Thank you.
Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star and one. The next question is from the line of Rohit Nagraj from B&K Securities. Please go ahead.
Thanks for the opportunity. First question is on blends. We have grown by almost 18%-20% during this year. We still have confidence that we'll be able to grow beyond 15%. What is the driving factor for this growth? From a composition perspective, how are the blends supplied to different geographies? Which geographies are finding this strong growth momentum coming in? Thank you.
I think we are essentially seeing the growth in all the geographies that we are present in, whether it is North America, Central America, or South America, as well as India and Europe. We've also opened some markets for our blend business in the Middle East and Africa and some of the Asian markets. The growth is coming from all across.
Right. In terms of, we can also refer to the presentation where Mexican, Brazilian, and North American, and the Vita for Belgium are predominantly blend market.
Right. Is it that we are displacing some of the local players? Or is it that the industry itself is growing by 15%? I just wanted to have a view on that.
No, no. It's a combination of both. Some of it is taking market share and some of it is growth.
Sure. Sure. That's helpful. Second question, in the opening remarks and subsequently, you told that for the operating funds, which will be abandoned, will be incurring about INR 8 crore per quarter. How long will you have to incur it and whether on a year-on-year basis that INR 8 crore per quarter can come down materially over the next two, three years?
Yes. The idea is that this INR 8 crore a quarter is for the next couple of quarters at max because after the closing procedure is completed in a way which complies with all regulations and safety laws, in that locality or in that plant, we will have no employees there, really workers there, apart from a couple which are required statutorily. The cash burn over a period of time on an annualized basis should not be more than INR 4 crore-INR 5 crore.
Effectively, in FY2027, it could be about INR 4 crore-INR 5 crore, nothing beyond that, right?
Yeah. That's right. Even this year, I mean, it will be substantially lower than what we've been working on.
Correct. Correct. And for the assets there, I mean, is there any value for those assets when we are probably dismantling and selling?
We are not dismantling it. We are not dismantling it. We are just mothballing it for a time, right? Still, we find some alternative use if we do.
Right. Fair enough. That's all from my side, thanks a lot and all the best.
Thank you. The next question is from the line of Ajay Surya from Niveshaay. Please go ahead.
Sir, congratulations on the performance. My question is, if you can highlight which Indian manufacturers do we actively compete with in the flavors, blend segment, and the vanillin part? That's my only question.
No, in the vanillin part, we don't compete versus anyone in India. It's only the Chinese and Solvay.
On the flavor blend segment?
Flavor blend? No, we don't have flavor blend in our portfolio.
Just blend, I mean. Just the blend.
The blends, there are many competitions. In India, there are different competitors. In every market, there are different competitors. There are local competitors. There are some MNC competitors. We have several lines in the blends, and there are different competitors in different blends. There'll be a large number.
Any idea on what market share do we hold over there? Can you put a number to that? Or is it difficult to understand?
It's very difficult to understand. Yeah, very difficult to understand the market share because it's very segmented.
Got it, sir. All the best for future.
Thank you. Ladies and gentlemen, if you wish to ask a question to the management, you may press star and one on your telephone keypad. The next question is from the line of Rohan Advant from Prad Capital. Please go ahead.
Yeah. Sir, thanks for the opportunity. Sir, on the gross margin range that you said of 45%-55%, which is a large range, but given the vanillin pickup and the pricing that we are obtaining right now and the benefit it has in terms of reducing catechol losses, etc., from a near-term perspective, shouldn't this margin move more towards 55% than the 45% range?
I'll tell you in the near term. That's what we are hoping. Let us see how it unfolds.
Yeah. Sir, because you said there are some headwinds, but this tailwind of vanillin should overwhelm those headwinds. Or am I not understanding it right?
No, as we said, that's why Nirmal said that 55% is the outbound range.
Yeah. That's why the range is between 45-55%, yeah, depending on at what level.
He also mentioned about the product, he says. He was hinting towards that more vanillin, higher market.
Got it. Sir, the current vanillin price of $13-$15 that you mentioned, it is without the duty in Europe being confirmed as yet. Once that is confirmed, should not this price further go up? Because today, there would be some Chinese vanillin finding its way into Europe, and that would be putting pressure on Europe. Once that is out, there should be more tailwind to the price.
Yeah. That is, of course, like Santosh said, you may be a surprise to you, but yeah. No, it would. It would essentially, what we understand is there's a 131% duty. It kind of says that there is room for at least 10%-15% of prices to go up in Europe from where they are currently.
Okay. Sir, so from a strategy perspective, are you thinking that let's not book too much capacity right now because prices could further go up and we could get locked into a lower rate? That is why it might take some time for volumes to pick up?
Yeah. There are two things to this. You're right. One is you don't want to sign very large volume commitments. Second is also some of these buyers have already bought lower-priced material and have stock. They will also wait it out and negotiate hard till such time as their stock positions become critical. It is a waiting game. You're absolutely right with your question.
Sir, just lastly, this confirmation of the European duty, is it just a matter of time or is there more process that may or may not go in favor of the duty being confirmed?
Very difficult to answer that. What we understand, at least from the market, is that the big players are all approaching us for volumes of product and commitments for volume, which obviously is giving a sign that for sure. The company which has the biggest injury and has applied for anti-dumping duty, they seem to be very sure that it's always that these duties will be levied.
Understood. Thank you and all the best.
Thank you. The next question is from the line of Surya Narayan from Philip Capital. Please go ahead.
Yeah. Just one more thing on the branded product that I am seeing, the DHA and Omega, the YSS products that is visible on this thing. Is there any visible progress that we have witnessed in FY 2025? And whether it is part of the aroma business or blend business, where is it being considered?
It's in the other. It's not put right now in any of the categories. Yeah, we have some very good conversations going on. Of course, FY2025, you won't see a massive jump, but there are some projects in the pipeline and some contracts that are being negotiated. If they come to fruition, which we should know in the next three to four months, in FY2026, we could see a big jump in that.
Okay. Whether the product approval from the advanced market or anything, if any major market that has been already approved or something like that, or it is not required to get any regulatory approval, it is just supply based on the customer approval?
Regulatory approval is not required. It is more from buyers.
Although it is a DHA and healthcare-related product, still it is that.
Yeah. It is permitted. All you have to do is most countries permit DHA in food and baby foods and for human consumption as well as for animal consumption. Regulatory is not such a big issue.
Okay. Okay. Just one more point. Post the cancellation of the operation there in Italy, ultimately going ahead, whether what run rate that we are quarterly seeing in terms of revenue, is that a sustainable number or how should one think or is it likely to? Because there is blend activity that is also there within that demand.
Yes. At present, blend for the annual blend is in the terms of INR 50 crore-INR 60 crore. We have moved our focus more to the ingredient business in Europe. This will certainly grow. The growth which Nirmal said in blend from 20%, some portion of that will also come from Italy.
Okay. So that means the quarterly run rate is definitely going to sustain with some growth?
Yes.
It is. Okay. Yes. Yeah. Thank you, sir.
Thank you. The next question is from the line of Rohit Nagraj from B&K Securities. Please go ahead.
Yeah. Thanks for the follow-up. Apologies if we have shared this data probably earlier. But in terms of the four segments that we are operating in, what could be a broader range of EBITDA margins for each of the segments?
It's a competitor information. You can see the overall margin in blend. We have been seeing a 20% vanillin share. So it's very difficult. Other businesses' rates and performance parameters are varied. EBITDA margins are very difficult to exactly give that.
We don't account for that.
Right. Right. Just in terms of maybe subjective assessment of the same, what could be the chronology in terms of high margin to low margin?
We saw 12%, 10%. That could be said to be a low margin on a composite business. High margin, predominantly blend has always been a very high-key business. Vanillin, it's an opportunity where it can even have a very high margin. Generally, we should be reassured.
Fair enough, sir. That gives a good idea. Thank you so much, sir.
Thank you. The next question is from the line of Rohan Mehta from Ficom Family Office. Please go ahead.
Thanks for the follow-up. I wanted to understand what is the gross margin for vanillin currently?
We shared the prices, sir. We said that we are producing at $9.5-$ 10, and average price is in the range of $12-$13.
But it is total cost. In terms of margin, that's total cost. Yeah.
These will be the spreads, right? The cost of production, which you have mentioned, that includes the other operating costs as well, right?
Yeah.
Yeah. I'm asking only on the gross margins, not on the spread.
At the current phenol prices and the crude prices, the raw material cost ranges between $7.50-$8.
Okay. What percentage of ortho- vanillin once you are at full capacity utilization will it be? As a percentage, what will be the percentage of ortho- vanillin at full capacity?
Scientific formula says that we should get 5% of ortho- vanillin on methyl vanillin.
Only on methyl vanillin, not on ethyl.
Okay. In terms of the cost of production for Solvay, would it be somewhere around $17-$20, or is it much lower?
Solvay's cost of production is only lower than $17-$20.
$17?
$17.
$17.
It's much lower. It will be in the $10 range.
Okay. Okay. This is both for the Europe and U.S. facilities.
Yes.
All right. Would it be sort of ridiculous or impossible to say that vanillin prices can move up to $20?
Who knows? Difficult to say about where it goes.
We wish to be able to go to $50.
Yeah, it's difficult to say.
Right. In terms of the blend.
Where it will go and settle.
Yeah. Sorry?
It is difficult to really say where it will go and settle.
Right. Right. In terms of the blend business, any two to three prominent players that you can name?
There is Kemin. There is Alltech. There is.
Animal feed. There are like 20 of them. In antioxidants, it's Kemin. Alltech is in some other products. Then you have Trouw Nutrition. You have GSM in some of these businesses. I mean, there would be at least 20-30 companies, yeah. EW Nutrition.
Right. Right. While I'm not asking for a specific market per se, what was the amount of vanillin sold in the last quarter as a whole? Could you give that detail?
You know the vanillin sale. We told you the vanillin sale price. Again, the vanilla aroma ingredients revenue can be calculated.
All right. All right. Thank you so much for the opportunity. Thank you.
Thank you. As there are no further questions from the participants, I now hand the conference over to the management for their closing comments.
Thank you. Ladies and gentlemen, thank you very much for being with us. We hope we've managed to answer most of your questions. We look forward to catching up with you again at the next investor call. Until then, have a good evening.
Thank you. On behalf of Camlin Fine Sciences Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.