Ladies and gentlemen, good day, and welcome to the Camlin Fine Sciences Limited Q3 and nine months FY 2026 earnings call, hosted by Strategic Growth Advisors. This conference call may contain forward-looking statements about the company, which are based on beliefs, opinions, and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. 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 touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ashish Dandekar. Thank you, and over to you, sir.
Thank you. Welcome, ladies and gentlemen, to this quarterly earnings call. We know your time is precious, so we'll get right into it. Joining me is Nirmal Momaya, Managing Director, and Santosh Parab, CFO. Santosh will first give you highlights and numbers of the quarter, after which both of them will answer your questions. Thank you for being here. Santosh?
Thank you, Ashish. Good evening, everybody. I'll directly jump into the business. Yes, this quarter has been a bit tepid. We had a turnover of INR 572 crore, where it was almost equal to what we did in the Q2. But there is a 6% hike as when we compare it to the last corresponding quarter. We had been telling you that we will be doing high amount of vanillin sales. We had done over 700 odd tons in the last year, which is looking at the entire tariff scenario and other things, we had controlled our sales because we knew that we failed there is more than likely to have higher realizations because of the tariff.
As you know, we have been selling at an average price of $12.5, especially in U.S., because of the tariff situation. In this quarter, we did INR 490 crore of sales to the third party. However, there is in the internal channels, that is, with our subsidiaries in India as well as in the finance India distributors, we have around 500, 650 tons, out of which around 500 is committed sale at $12.5. But the recent reduction of tariff to 25%, we can have a benefit of that on the INR 400 crore ton stock, which we have in the, some part of it will fall in the quarter one, the quarter four, and then major portion will fall in quarter one.
From quarter one, the real benefit of this will be appearing. So vanillin, we did 490 tons, which is around INR 55 crores, with a realization price of $12.5. As far as trades, the main ingredient business is there. It has seen a fall in it. It has come down to INR 80 crores from INR 87 crores, primarily for two reasons. One, the prices have been going down, and that's what is impacting our margins. And as you know, there are local manufacturers who have come, and there's intense competition in India itself. Plus, this business has a very plateaued growth, and hence there is an intense competition. We had some bit of lower volumes also, but the major portion was because dip in the realizations on stakes.
As far as blends is concerned, we have been saying blends has been the hallmark of our business, and we have grown by around 11% corresponding quarter and almost 13% this quarter. We clocked around INR 271 crores in this quarter. Of course, this also was pushed by our recent acquisition, which happened in December, when the French company, Vinpai, a listed company, which contributed almost near to INR 13 crores in this quarter, and that has also helped to grow the business. Blends remains on track. It is going to grow at a very high growth rate of what we have been saying. As far as performance is concerned, as we have been saying, that this is what diphenol, the...
Other than aroma and the stakes, these are other chemicals where there were always lower margins, and it, it remains plateaued. So in total, the revenue was INR 457 crore. Coming to the cost structure, if you see employee costs, we have been saying, employee cost has been increasing because we are bracing for the future. We have been acquiring new, geographies and companies, all over the world, and which requires people on the ground all across who are experts to, help us sell. So there, there's a lot of investment in employee costs, which has been happening over last few quarters. Now, almost, we will be adding few people, but not more. So you can see the employee cost has been quite stable. The only increase is because of the acquisition, which we did in Vinpai.
So the salary also increased one month in Vinpai, and generally, in the American and Latin American markets, there are like, it's like Diwali and Christmas, so there is some kind of statutory bonuses also paid. Other, as far as other expenses are concerned, expenses are concerned, they remain under control, and we feel that they will remain in this range for the next quarter and will increase as the revenue grows. EBITDA, coming to the EBITDA, yes, EBITDA expectation was high because we had said that we'll be doing a higher number of on vanillin, which we have, in a way, controlled it to take the benefit of the tariff because if we would have sold now, we would have lo-- In any case, realize only $12.5.
Delaying the sale into the subsequent quarters will help us to get $2-$3 more per kg, and which is plain cash and entire EBITDA. So that was a plan to do. You would have also learned that we had disclosed that there was a fire incident last week, last Saturday, at our one of the blending unit in Brazil. It was a massive fire at one of the machine which was being commissioned, and the fire was such of such extent that almost we have lost all the stock which was there in the... It was along with the warehouse, this unit. So however, we have another unit also, which is working and is operational. Obviously, we have to we will keep on continuing operation. Brazil was looking forward.
There was great traction, and it remains. Very interesting orders on various blends as well as biodiesel market, which is a market in Brazil. We have trying to provide raw material from our nearest geographies and also from the local distributors. We want to keep the sale happening, obviously, because we are sort of buying on spot, bit of margins will get impacted, but we are trying to keep the traction on sales, keep our customer service, honor all our orders. As far as today's condition is concerned, the survey is expected, insurance survey is expected to start tomorrow. At this moment, we feel that we are adequately insured. The surveys generally take three to four weeks, so there will be clarity on the surveys and other things.
We are also using tollers, local tollers to also satisfy the manufacturing and servicing the customers. At present, the unit is entirely closed. We don't think it will be immediately usable. As the time passes, we'll see how to rebuild it, where to rebuild it and other things. You would have also read in our results that our statutory board auditors have already filed for a petition for liquidation of Europe. And actually, the blends, the continuing business of blends will continue, though the entity will be closed because we'll be shifting that business to our other companies in Europe. So we are not worried about the revenue of continuing business.
But the good thing is that, the cash burn, which has been happening, will certainly stop going forward. The plea with the court is, scheduled on February twenty-sixth. We'll have more clarity, and as per the requirement, we'll keep you updated on, that. You would have seen that there were some few exceptional items also in, in this quarter. As we acquired Vinpai, the, the acquisition-related cost, the due diligence cost and other thing had to be recognized, which was around INR 3.69 crores, which has been accounted. Obviously, the new labor code. We had aligned our salaries much earlier, so we were very near to 50%. And as you could see, that even though we have around 800 employees in India, the impact is not high.
Other aspect is that we have a very younger team workforce, hence there is partially less. We have provided for all the required under the statute, what is to be provided already, which is INR 2.25 crore. We have also provided for an advance loan, which was a very old loan, which we had given for some project, which unfortunately, we don't think accounting provision is required, but we still are, will be trying to recover it. So subject to that, the PAT has been impacted for this. We have also shown the discontinued business, which is mainly on account of Europe. It's around INR 9 crore and some portion on China. China is also on the verge of liquidation.
We have filed the necessary documentation. We accept that it will move the liquidation process will move by the before the end of this financial year. Going remaining year and going forward, as we feel that vanillin is the business, and the good thing is that when it has already the duty has come down by 25%, and very near future, it will come down furthermore. Blend keeps, blend has been growing. We have this inorganic acquisition of Vinpai, which will certainly help us to grow our business at Vinpai, as well as those products we will be replicating and selling all over the world. So the blend business is going to keep on growing at an at the same pace as it it it was in the earlier years.
Now we open the forum for more questions.
Thank you very much. We will begin the question and answer session. Anyone who wishes to ask a question may press star and one on the 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. Our first question comes from the line of Hrishikesh Shah from Alchemy Capital. Please go ahead.
Hello. Yeah. Hi. Am I audible?
Yes, sir. You are. Please go ahead.
Yeah. So my first question is, currently, I have vanillin realization at $12, right? And you mentioned that they may increase by $2-$3. So according to me, let's say your realization in U.S. is $18. If it more your tariffs move down by 25%, then your realization so should increase by $6. So where is the disconnect in this?
The price in U.S. is around $18-$19. That's correct.
That's right. Right.
But what comes from India, 50% duty has to be paid. So to match the realizable value, because there is a local manufacturer that's always selling at $18, who doesn't have the duty. If we have to match the price of $18, we have to bear the duty, and we used to transfer the material from here at $12, pay the 50%, $6 duty, which is cost to us, and sell in the open market at $18. So that's why the realization was $12. Now, if the duty becomes 25%, we'll get that additional duty, which we are paying to the government, will help us increase our realization. In another words, we'll be selling at around $14-$14.5, pay the duty at 25%, which will match the local price of $18.
Okay, understood. What is the volume guidance for FY 27?
For FY 2027, we have both Methyl Vanillin and Ethyl Vanillin, and our guidance for FY 2027 is, between the two, the total would be 4,000 metric tons.
Okay, understood. And, sir, I had one more question regarding Vinpai. What was the revenue for the full year for them? I know we have consolidated from December onwards, but just to get an idea.
Around INR 13 crores was their monthly, which has been consolidated, but that turnover has been in the range of INR 12.5 crores on a monthly basis in the term.
Okay, understood. And, sir, our margins are down, like, to 4%-5% this quarter. So what do you think is a steady state margin that we can expect after we have when vanillin realization is going up and your volume is also increasing on vanillin side? So what are the kind of margins you expect, gross margin as well as EBITDA margins from next year onwards?
Sorry, what is the margin?
Hello.
Yeah, one sec.
Yeah. Okay.
The gross margin, as you said, was impacted by the States business. As I said, the realization has come down almost the sale price of BHA, TBHQ is down by around $1. The cost remains the same, so that has impacted us. So the gross margin, which has come down because of the sale price decrease. It was 46% in nine months quarter two, which has come down. Now, from 46%, it has come down to 45.8% in this quarter on operating revenues, and this is mainly because impact of States. And also the new acquisition of Blend also will take time to settle, so there is a cost in there.
EBITDA margin has got impacted, also, because of the, mainly because of state, and we have sold lesser amount of volume in this year, which impacted the fixed cost, fixed cost, on the vanillin business. That's why the... There is a reduction of around 55 basis point on the EBITDA margin as compared to quarter two. So it was 7.3, it came to 6 point.
To answer your question on next year, FY27, the gross margin should improve by at least a couple of percent with higher realization of vanillin, as well as growth in the blends business, which is also depending on the product mix, there could be an improvement in margin. So our guidance is that we should improve the margin by 1-2%. It'll be in the range of 46-47%. EBITDA margin, based on the growth that we are projecting in vanillin and the blends business, should improve and go to, you know, to between 12%-14%.
Okay. And sir, we already are at 46% right now, so and you are saying we'll be at 46%-47%. So, yeah, so it should be higher than that, right? 48, 49 or something.
We are at 45 right now. We are at 45, so we are saying we go to 47.
Okay, okay. Understood. Thanks a lot. And sir, once again, EBITDA margins from 12%-14%?
Right.
Okay, understood. Thanks. Thanks a lot, sir.
Thank you. Our next question comes from the line of Satish Kumar from InCred Equity. Please go ahead.
Hi, sir. So I just wanted to understand, what is the duty right now in U.S.? It is 25% or it is only 18%?
No, it is 25%. What is expected is once the trade deal is officially signed and announced. Right now, only fact sheets and some other documents have been shared by both sides. But once it is finalized, it'll come down to 18%.
But today, whatever has been cleared in from India, in U.S., whether it is in bond or coming from the ship, the duty is 25%. So, the additional duty which was levied on twenty-seventh of August, 2025 of 25% because of Russian oil, that has been knocked out. But the first increase to 25% on first of August, 2025, still remains. And that could come down after they sign the treaty deal between India and U.S. Okay, got it, sir. And sir, the second question was that you were saying that we didn't do some sales, so this quarter of vanillin. So what was the quantity and of that?
So, we'd say that, we would have pushed and sold another 200 tons. We went slow-
Okay.
tried to push it in the next quarter so that we get the duty benefit. So we would have made around another 200 tons at $12-$12.5.
Okay, got it, sir. And so, the next quarter, our vanillin sales should be in the range of, what, sir?
In volume?
Yes, sir.
Yeah. So, what we are doing now is we are taking a campaign for Ethyl Vanillin.
Mm.
Starting in the next week, we will start the production of ethyl vanillin, which we expect by March, we should be able to produce another 300 tons or so, and we produced another 300 tons of methyl. We should be in the region of 600+ tons.
Satish, to add to this, we have a challenged stock of around 150, 550 tons of that. 150 is at $12. It is already committed. So, and another additional 200 tons is likely to be manufactured and sold. So you can just count that number.
Yeah, okay. So, maybe around 600-700 tons kind of range, right, sir?
It should be between 600 and 700, because.
Yes.
Half the quarter is gone, the Q4.
Right. Got it, sir. Got it. Thanks, sir.
Thank you. Participants who wish to ask a question may press star and one on the touchtone telephone. Our next question comes from the line of Surya Narayan Patra from Philip Capital India Private Limited. Please go ahead.
Yeah, thanks for the opportunity, sir. First question is on the vanillin pricing. This is, it looks like that, both U.S. as well as the Europe pricing currently looks similar, during the tariff period. So in the post-tariff scenario, if the U.S. pricing is likely to see a rise, so whether we should expect similarly in the Europe also?
No, not in Europe. So Europe, the anti-dumping duty on Chinese material is 131%, whereas on-
Mm.
In the U.S., it's effectively with the tariff at about 265%.
Okay.
There is a difference. That delta will remain.
Okay.
The DDP prices today in the US are $19-$19.5.
Mm.
-DDP. Whereas in Europe, that is around $15-$15.5.
Okay. And we will be-
That difference will remain.
Mm. And our realization would be slightly lower than the other parties, obviously.
Yes. Correct.
in U.S., what is the price differential between the ethyl and methyl, sir?
Typically, the price difference is between $1.5-$2.
Okay.
In the U.S., that's about $21 or so.
Okay.
DDP.
Sure. And, second question is on the Vinpai and Vitafor integration and way forward, if you can just talk about it, because this is a year of acquisition, integration, and some strategic plans about it, people addition, all that. So next year, going ahead, how should you—how should one really think about those two business and that's contribution to the overall blend, sir?
Yeah. So Vitafor, as you know, is in the animal feed side of the business. We've... After acquisition, we've got several registrations now in for several of our products in many countries. So the push on Vitafor is going to be in the coming year, in FY 2027, is to scale up from where we are currently at roughly EUR 12 million-EUR 13 million top line, to take it to about EUR 17 million-EUR 18 million top line in the next financial year. So we're looking at least a 40%-50% growth there. We've launched the product in the U.S. market, in Mexico, and in the next quarter, we are launching it in the Brazilian market, as well as we've launched the product in the Indian market.
So wherever our own sales force is operating, we have launched these products. We are increasing our reach to the other parts of the world through various distributors. And also, some of them in some countries we are yet in registration process. So all of that will kind of start opening out in FY 2027.
Okay. Uh-
For Vinpai, the next one was on Vinpai. Vinpai, which is-
Yes
... doing about EUR 10 million, about EUR 11 million.
Mm-hmm
... of top line.
Mm-hmm.
In FY 2027, we look at, again, scaling that up by at least 40%-50%. We've got several businesses in different parts of the world where our products have been approved by customers. Here, of course, there's no registration, but we have the approval process with customers. And we are, you know, pushing hard to see if we, you know, can grow it even faster than that. We've launched the product in India. We've launched the product in Mexico and Central America, in Brazil. So wherever, you know, sales channels are there, we've started introducing these products.
Okay. So, sir, the next question is about the base business, the antioxidant business in Ingredients. So that has been seeing a kind of continued competition enhanced, either because of the Indians or because of the Chinese.
Yes.
So the kind of a price pressure also, that is a separate thing, along with the crude. So, given that, is it fair to believe that, okay, this is a kind of, this business is likely to see a kind of, a change in the kind of, something like that? If that is a continuing phenomenon, so, what is the utilization of the diphenol plant that you're undertaking for next year?
So, for the diphenol plant, for the next year, we are... Basically, we calibrate the diphenol based on catechol.
Okay.
Really, it's not so much the hydroquinone, it's more the catechol. Because hydroquinone, even if we don't do value addition, we get with the antioxidant business, there are some opportunities in performance chemicals that we can do.
Okay.
But the idea is, at this point of time, we are saying the diphenol capacity we will run at similar as what we had in the current year.
Mm-hmm.
There is enough outlet for us for HQ in the coming year, because we have some contracts that we have signed also, so which will give us some volumes for selling Hydroquinone and Catechol. Of course, Vanillin is the big outlet for us.
Okay. Just two clarification I wanted, sir. On this fire impact, is it or whether we are likely to see any kind of impact in the coming quarter, although it is fully insured? That is one. And secondly, are we getting any out of the liquidation process, sir?
No, sorry. What was the first part? I couldn't... Your voice broke.
Okay.
So-
About any fire impact that we are likely to see in the upcoming quarter for Brazil, although it is fully insured.
Yeah. So that, I mean, that we will have to see how the insurance process goes.
Mm-hmm.
We're very difficult to predict right now whether there will be any impact, and if so, what will be the impact?
Mm-hmm.
At this point of time, in fact, the access to the premises has not been allowed as yet by the fire department.
Oh
... because they want to check the integrity of the structure, and they don't want any other mishaps to happen. So very, very early days to say whether there will be an impact, and if there will be an impact, what that would be.
Mm-hmm. No, it is not only the kind of fire loss, fire-related loss-
Mm-hmm.
Business loss subsequently in the subsequent period, in the-
So in the business loss, not really. We have the blending unit, which was our original blending unit. This was unit two-
Mm-hmm.
Which was just commissioned right now for looking at the-
Okay
... the expanding numbers that we had. So, and in fact, the incident happened with a brand-new equipment also, because that site was just being started out.
Mm-hmm.
So, in terms of manufacturing, there will not be so much of an impact for us. If there is any shortfall, because we have some new contracts that we are signing. So for which if there is a shortfall in capacity, we have contract manufacturing tie-ups in place.
Okay.
which we'll be able to service. Having said that, of course, since the raw material was destroyed, we have to arrange for raw material immediately for servicing the business that we have on hand. And that possibly can have some impact on margin in Brazil for the short term, for the, you know, for the next one month or so, till material which is on water will reach Brazil. I mean, already there's a lot of material which has been shipped out in anticipation-
Okay
... of all these contracts. That should start hitting Brazil in the next 15 days. There would be some impact, but we are trying to buy material locally and, of course, it'll be more expensive than what we would have supplied from India or from Mexico. But having said that, it's only temporary. For one month or so, there will be an impact-
Okay
... on the margin. Not on the top line.
Okay.
Top line, we'll maintain.
Okay. Any benefit that we are likely to see from the liquidation process, sir?
... liquidation of Europe?
European, yeah.
Yeah. So now in the benefit is really the cash bleed that was there, and you know every quarter that we were taking a hit. Once it goes into official liquidation, which by end of this month the tribunal or the court will have to decide, and if that is the case, then of course the entity gets dissolved into a liquidation entity, and of course no other impact then will come to us.
Any money realization out of the liquidation is not likely?
No, unlikely. Unlikely.
Okay.
At this point of time, unlikely.
Sure, sir. Yeah. Thank you, sir. Wish you all the best.
Thanks.
Thank you. Our next question comes from the line of Rehan from Coheron Wealth. Please go ahead.
Hi, good evening. Thank you for taking my question. Am I audible to the management?
Yes.
Yes, sir, you are. Please go ahead.
Thank you. Just couple of questions. What would be the margin profile at the EBITDA level or growth level for Vinpai and the other acquisitions?
Vinpai really started late. It was a straight asset we have bought. Vinpai is just near breakeven on EBITDA. The breakeven should be at INR 15 crore. They have done INR 13 crore. But they are at present just below the breakeven margin, but as the business grows, they would be not able to sell because they have no much access to the market, which we have given. So it will generally go, yeah, as the boss said, if it's a 50% growth, it will certainly start gaining the margins. But at this point, it's almost EBITDA negative for a month.
Vitafor is already broken even and has been making small 4%-5%, 10%-12% EBITDA, and I think it will grow as we start increasing the business.
Understood. And if you could just quantify the expense for Vinpai acquisition. I think you mentioned about 3-4 crore on employee expense. On the other expense front, we've seen a sharp jump of about INR 10-15 crore on a year-on-year basis. So when you mentioned, I think it is sustained. Any reason for such a sharp jump we're seeing, or is it only a one-time because of the acquisition?
It's better to understand the Vinpai acquisition, it's better to compare it with last quarter. The increase in other expenses is predominantly because of Vinpai for a month. So, naturally, going forward, Vinpai had generally an operating cost of around INR 3.5-4 crores on a monthly basis, so that will come. That will be an increase in the next quarter. Similarly, Vinpai's employee cost is also around INR 1.5-2 crores per month. So that also will increase. As far as other expenses from other businesses are concerned, we don't think there will be an increase.
Obviously, there is a Brazil impact. If it comes, then there could be some expenditure on that. But we don't think the other businesses are going to increase. But in the next quarter, obviously, other expenses and employee cost will increase because the entire three months it will come from Vinpai.
But that would be proportionately with the sales as well, right? This quarter was only, I think, 30 days.
I just said that, yeah. So it's a 30-day, INR 12 crore. The run rate is already INR 2.5 crore, when they were under staff. Now we have come, we'll be certainly increasing the business. But looking at this coming quarter three, it's a very short period, right? Three months, you cannot... But I, we think that we will do, we'll keep maintaining that run rate for the balance year.
Understood. Sir, just a couple, another question on vanillin. You have about INR 400 crore of stock you mentioned?
400 metric, not INR 400 crore.
No, no, 400 metric tons.
Yeah.
Last call, we were gauging that we would see some kind of channel inventory easing off. Are you seeing that happening, or are we still seeing a stuck channel?
Sir, for Vanillin-
The channel stock, sorry, what was your question?
I think last quarter, when you had the conference call and the quarter before that as well, you were seeing buildup of inventory because of the ADD.
Yeah.
You gauged that it would take couple of quarters before, you know, you have a better insight as to how your demand scenario is going to pan out.
Right.
Has there been liquidation? Consistently, you guys have also been scaled, which is extremely great in a tough time. Are you seeing a possibility for better tonnage going forward? I know you've given a guidance of 4,000, but I want to understand-
Yes.
Can we see European pricing move up to probably $14-$15?
The pricing will not move up. Pricing will remain in that region because the anti-dumping duty effectively makes a Chinese product come in at $15. So that's at DDP level, so which means at a net level, it's about $13. So we believe that the prices in Europe will not go up. It's only in the U.S. where the tariff difference of 25%, our margin will improve. And in terms of channel stocks, they are being liquidated, so that's the reason why you know, we think that we'll be able to scale up our sales from around 2,500 tons this year, 2,300, 2,400 to about 4,000 in the next year.
... Understood. And, if I can just squeeze in one last question. Santoshji, could you just re-explain that provisional for INR 11 crore that we've taken for this quarter?
Oh, no, the exceptional item?
Yes. I think it was INR 11, the PDD of INR 11, INR 11, INR 12 crores.
Yeah.
The provisional item.
So there are three components, acquisition related called labor costs, and we have also made a provision for a doubtful advance from loan, which was given 5-6 years back. That was for anticipating a project. The project didn't happen, and hence now, because 5 years are gone, this is an accounting adjustment. We will be taking other actions to recover that.
Understood. Thank you.
Thank you. Participants who wish to ask a question may press star and one on the touchtone telephone. Our next question comes from the line of Rohan Advant from Praj Capital. Please go ahead.
Yeah, sir, thanks for the opportunity. Sir, what was your Vanillin tonnage in the first nine months of FY 2026?
First nine months?
Yes.
1,740 metric tons.
Okay. Okay. Sir, next year we plan to do 4,000 tons, and even if we realize, say, $14 on an average, that is revenue of INR 500 crore. In your comment on margins, there you said the gross margin should be at 46%-47%. With vanillin scaling up and realizations improving, shouldn't it add more to our margins, or will the blends business face margin pressure, and that's why the margin improvement is likely to be lower?
So the gross margin in the blends business typically is less than 45%, and we are going to grow the blends business by at least 20%-25% next year. On a base of INR 1,000 crores, we are looking at at least 13-15 crores in the next year. So that's why we are saying overall margin will average out at this price, at, at this level.
Oh, okay. So your revenue growth, it should be much higher because Vanillin will grow significantly and also the blends business.
Correct, correct. That is the assumption, yeah.
Okay. And sir, on this 4,000 tons of guaiacol, you know, guidance that you have for FY 2027, are you already... Have you, you know, committed offtake, or you are waiting for spot prices to maybe improve and get higher realizations? How are you looking at that offtake, and how confident are you of 4,000 tons?
So I mean, in this environment, we've done 2,400. So with a large amount of channel stock lying pre-anti-dumping duty in anticipation there. So our assessment is that the market will open up. We are not rushing in for any contracts because even customers are looking at quarterly contracts as opposed to longer ones, because they don't know how long this channel stocks will remain. So I think our sense and our estimation comes from the fact that given all the adverse situations that were in FY 2026, with channel stocks being emptied out, to grow it by about 50%-60% from where we were is very likely.
Understood. Yeah. Thank you. Thanks for taking my question.
Thank you. Our next question comes from the line of Niraj Mansingka from Whitepine Investment Management Private Limited. Please go ahead.
So just wanted to clarify, if right now the prices in the U.S. is $19, and if we have a 25% tariff, we'll get a realization of $15. Is it right?
Yeah, about 14.5 or so, because there is also local trade and things. This is duty paid, DDP.
And if the tariff goes to 18%, our realization would be-
Within.
15.5 or so, right?
Correct, correct, correct.
Sir, this does not... And there can be, so you said that the potential of price increase in Europe is lesser than U.S. because U.S. has much higher tariff, and it's not adjusted to that level-
Correct.
The dumping duty.
Correct.
Is it right that U.S. is 19, and if you assume a 265%, it comes to $23+? If I assume-
Yeah.
I'm just assuming $6.5 in China.
In China, $6.5 will come to $23. That is right.
Okay. So there is still, there's still $4 upside in the price-
Yes.
of vanillin-
Yes.
If there's a tariff, pursue the way Europe is getting.
Yeah.
Okay.
Yeah.
And, sir, if the tariff deal is signed today, so then your realization will go up immediately, right?
Correct.
Okay. Then why are you saying that we'll be realizing less value for next year? Because there's a very high possibility of that being signed also, right?
Yes, yes, of course. But till it is signed, it is not signed. We were waiting for this, reduction from 50-25 for the last six months. So, I mean, I can't predict that, you know? So-
I understand.
We have to assume at 25% and work on that.
... And on these stocks, please, I could not follow, very apology for that. You have 400, sorry, you have a guidance of 700 tons for Q4. Am I right?
Correct. Correct.
of that 700 tons, how much will be at $14.5 if the, and how much would be at the $12.5?
I would say the U.S. will have out of 700 tons, about 350-400 tons will be in the U.S., which will be at a high realization, and Europe is at the same realization.
Europe same realization means $15-$14.5?
No, no, $12, $12, $12.5. What we are getting today.
$12.5.
Yeah.
Okay. And, sir, what about... So, okay, is it right to assume the similar ratio would be there for FY 2027 for the entire 4,000 tons?
Yeah, it'll be 60% in the U.S. and 40% in Europe.
Okay, got it. And, sir, how much was the Brazilian value of the stock that you were carrying, which you got fire?
The stock value was about INR 24 crore. BRL 16 million. So how much is that in rupees?
Okay, BRL 16 million. Okay. And,
BRL 16 million. 16, 16 crores, roughly. Yeah.
INR 16 crore. And, and, okay. And, this was on this... Yeah, so and what is your guidance on the new plant of the competition starting in the vanillin? Can you give some color on that? But not in the...
Which one?
I think the U.S. plant was supposed to start for the vanillin. I wanted to know on that.
Yeah, in Europe, actually, the European plant,
Yeah, yeah, of course.
So that, of course, that will start now, soon. And, so the total market, as we've said earlier, that between Europe and U.S. is about 16,000 tons. And the two plants in U.S. and Europe put together have a capacity of 10. So there's a gap of 6,000 tons, which needs to be filled, which we expect that hopefully we should be able to fill at least 80% of that.
Got it.
So, yes, sorry to interject. I'll just correct the numbers, because on the Brazilian loss by fire, total loss at the book value is at INR 33 crores. Out of that, INR 28 crores is inventory. He told BRL 16 million, that is Brazilian real.
Real.
The Indian rupee is INR 28 crores and around INR 4.5 crores of machine and equipment. So it's total 32.7 crores.
Got it. So if there's a delay in the insurance, then you'll... Is it possible you'll write off next quarter and write back whenever you recover, get that amount?
So that's an accounting thing, how the insurance-
Right
... companies look at, look at it. We are confident, but you know how the insurance companies, there are cuts and things. If the insurance claim is finalized and there is no dispute, we may end up recognizing that shortfall in the next quarter. But it's not at all determinable at this stage, because the surveyors have not even entered that factory site.
Got it, sir. And, sir, just, I think you said about the channel stock. Do you have any clarity on... Because the US pricing will only go up to $23, once the channel stock is totally liquidated. So any color on your side?
No, I think it is more driven by what our competitor in the U.S. does in terms of pricing. So, since they are the leaders there and they define the price, we just follow. In that sense, the price will be really defined by them. Currently, this is the price that they've defined, and as the channel stocks do come down, they will probably increase it by $1 or so. I don't think they will take it to match it to the anti-dumping duty impact. They'll keep it just below that.
Understood. So last question, on the China and the Europe cost, which were for the factories which were shut down, what was the run rate last quarter, and what will be the run rate in, say, Q1 of next year?
In Q1 of next year, as I mentioned earlier, we'll be in by end of this month, there will be a ruling on the liquidation. And if it goes into liquidation, then there is no impact-
Cost
... to us on our balance sheet, on a running cost basis. And even China is the same by end of this quarter, that will also go into liquidation or winding up. So our estimate is next year, we should not have any significant impact.
Sorry, what was the impact for Q3?
So Q3 was INR 8 crore on discontinued business of Europe and INR 1 crore rupees on a quarter of China. Both of these, if the plea for liquidation is accepted, then pro rata will not have any cost from February on Europe, because it is, as said, going to liquidation. As far as China is concerned, there's a different process. So we may have to bear INR 1 crore expenditure in the coming quarter and maybe another INR 1 crore in the next quarter.
After Q2, Q3 of 2027, your cost will become zero, which cost run rate is today, all?
In this year itself, in the next quarter,
China will be there?
... Europe, the hearing with the tribunal or the court is on February 26th. Once the plea is accepted and given, then the bleed stops immediately because liquidation, and it goes to the liquidator, liquidator becomes the operator of the company, we are out. So if it doesn't happen, courts may take their own time, a few months. It's Italy, so it's very fast, but they may take a few months. In that case, the control remains with us, and we may face that cash bleed of INR 7 crore-INR 8 crore next quarter also on Europe. China has a INR 1 crore run rate of bleed, because we had to keep some people there to look after the proceedings of liquidation. We may end up INR 1 crore of bleed for two more quarters. Got it.
So our run rate after this goes down, the China and the Europe, the EBITDA will improve by INR 9 crore per quarter? At present, this bleed is not shown in operational EBITDA. It's shown as a discontinued business.
No, I know.
It's more of a cash bleed, so how you look at EBITDA is if it is net of that, then there's no impact on EBITDA.
Got it, sir. Great. Thank you. Thank you very much for the information.
Thank you. Our next question comes from the line of Chaitya Doshi from InCred Capital. Please go ahead.
Hello. Thank you, sir, for giving my question. Sir, just a couple of questions. Sir, have you got the-
Sir, can you speak a little louder?
Hello. Is it audible now?
Yes, sir. Please go ahead.
Hello, is it audible now?
Yes. Yes, sir, please go ahead.
Yeah. Sir, have you got FSSAI approval for Ezential 4001? Hello.
Sorry.
4001.
Hello.
Yes.
Have you got FSSAI approval?
Mm-hmm. No, we applied for it.
Okay.
Yeah, not yet.
What is the status of selling Vin'Curd in Indian market?
Yeah, so there is a potential, so we are working on that.
Okay. Okay.
Yeah. So it's basically, the market is large. I mean, the cheese market is growing in India, and Vin'Curd is a product which goes into manufacturing cheese. And so the process is, of course, these are all processing aids, so most producers don't really need to get FSSAI because we are FSSAI approved, but the product doesn't need to be because it's not part of labeling. So that's a question of interpretation. So I mean, that's something that is in the pipeline.
Okay. Okay. And, so what would be the overall take on vanillin sales for FY 27 guidance, and what would be your value growth?
No, we've already given that, no?
Okay. And guidance for blends?
For blends also, we've given that. 25% growth over FY 2026.
Okay. Thank you, sir.
Yeah. Thanks.
Thank you. Our next question comes from the line of Shikhar Mundra from Vivog Commercial Limited. Please go ahead.
For the company as a whole, what kind of revenue guidance are we targeting, giving for the next couple of years, 2027 and 2028?
2027, we should be looking at about INR 2,200.
200?
Yeah.
Okay. And for 28?
That, that'll be about 2,400.
Very well. And, and it's considered as of now?
Sorry?
Considering similar prices as of 2,200 is considering similar prices as now of the products.
Yes.
Okay.
Yes.
What kind of CapEx are we looking to put in for the next couple of years?
So at present, no new plants. There is a maintenance CapEx which keeps on coming because of the big plants which we have. So we have a CapEx, maintenance CapEx of around INR 40-50 crores on an annual basis. But at this moment, we have not any plans at the moment.
Okay, so for the CapEx we have, so these are gonna be CapEx?
We may require... If I'm going to increase my revenues, there will be-
The working capital is fine. I, I meant the long-term borrowings. So these, these are peak-
Nothing on cards. Nothing on cards. These, these, these are being repaid, and they will go on as around for 40 to 50 crores, which is repaid every year.
Okay, got it. So I mean, I want to understand, for, as a company as a whole, there are so many moving parts, you know, there's vanillin, then there are blends. So if the vanillin prices rise, the blend prices are falling. So I mean, something or the other is pulling our performance, you know, down. So how should we look at it? I mean...
Very difficult to answer that question, yeah. Our blend prices are not falling. Our margins in the blends are quite stable. Gross margins are not falling. It's only in the straights business, which is the TBHQ, BHA business, where the margins have fallen in this year.
Oh, I see.
Vanillin, the gross margin remains stable.
Got it. Got it. Got it. Thank you. Thank you, and all the best.
Thank you. Ladies and gentlemen, due to time constraints, we take that as the last question. I now hand the conference over to the management for closing comments.
Ladies and gentlemen, thank you very much for participating in this conference call. We hope to be talking to you at the next end of this quarter. Until then, good day. 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.