Oriental Aromatics’ quarterly revenue grew 15% driven by robust volumes and production expansion, as it navigates raw material cost hikes and aims for future growth despite margin pressures.
Oriental Aromatics said quarterly revenue rose 15% from a year earlier to Rs. 260 crore in the three months to June 30, helped by a 22% increase in sales volume and an 18% rise in production. The Indian fragrance and aroma ingredients maker also said EBITDA margin improved sequentially to 7.62%, though it remained below the level a year earlier as higher input costs weighed on profitability.
Managing Director Dharmil Bodani said the company’s Mahad site is still in the early stages of commercialisation, with the plant running at 50% to 60% capacity. Other facilities, excluding the hydrogenation unit, are operating at 85% to 90%, while the fragrance compounding business still has room to expand. He said the group is targeting sales growth of 10% to 15% over the next year.
The earnings call underlined both the company’s strengths and the pressure points in its business. Oriental Aromatics pointed to its backward-integrated model, broad product range and long-standing ties with large global fragrance customers as competitive advantages. At the same time, it acknowledged that the specialty aroma ingredients market remains highly competitive, with capacity additions across Asia leaving pricing power limited and making full cost pass-through difficult.
Raw material inflation remains the biggest drag. Bodani said alpha-pinene prices have climbed 70% to 80% over the past five months and remain elevated, putting pressure on camphor and other aroma products. He added that the company has used long-term supplier relationships, closer inventory management and selective pass-throughs to soften the blow. Chief Financial Officer Girish Khandelwal said the effective tax rate for fiscal 2027 is expected to be about 25%, while exports accounted for 35% of revenue in the quarter, up from 33% in the previous financial year. The company also said net debt-to-equity improved to 0.56 times as of June 30, 2026.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
