Camlin Fine Sciences (CAMLINFINE) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 revenue was INR 3,958.5 million, down 1.5% sequentially and 5.7% year-over-year, with gross margins improving to 44.9% from 34.9% last quarter.

• EBITDA margin improved to 7.2% from the previous quarter, but profitability was impacted by foreign exchange volatility and impairment provisions.

• The Blends business grew 13.4% quarter-on-quarter, maintaining its dominance and expected to continue this trend.

• The European diphenols facility remains shut and is being repurposed, contributing to losses and inventory write-downs.

• Acquisition of Vitafor Invest NV, Belgium, expands presence in European and African animal feed markets, with results included from June 11, 2024.

Financial highlights

• Consolidated revenue for Q1 FY25 was INR 3,958.5 million (₹39,585.33 lakh), down 1.5% sequentially and 5.7% year-over-year.

• Adjusted EBITDA margin improved to 7.2% (up from 1.1% in Q4 FY24), with gross margin at 44.9%.

• Consolidated net loss after tax and exceptional items for Q1 FY25 was INR 346.5 million (₹3,465.02 lakh), improved from Q4 FY24 but down from a profit in Q1 FY24.

• Finance costs increased due to INR 6.5 crore in foreign exchange losses and higher reported finance costs.

• Basic and diluted EPS (consolidated) for Q1 FY25 were negative at (₹2.03) and (₹2.01).

Outlook and guidance

• Management expects robust growth in blends to continue, with vanillin sales ramping up in Q2 FY25 and temporary weakness in aroma to recover in H2 FY25.

• EBITDA margin is targeted to reach double digits for the full year, with healthy top-line growth towards INR 2,000 crore.

• Inorganic growth anticipated from Vitafor acquisition, leveraging its network for expansion in Europe and Africa.

• Focus on high-margin blends, new product introductions, and capacity optimization in specialty and aroma ingredients.

• No further impairment indicators for CFS Wanglong Flavors (Ningbo) Co., Ltd. as of June 30, 2024.