Oriental Aromatics , a leading manufacturer of aroma chemicals, camphor, fragrances, and flavours, has released its financial results for the first quarter, revealing a mixed performance with revenue growth but significant profitability challenges.

Revenue Growth and Volume Increase

The company reported a 4.5% year-on-year increase in revenue, reaching INR 2,255.00 crore for Q1. This growth was supported by a 10% increase in production and a 4% rise in sales volumes compared to the same quarter last year. The higher output from the company's hydrogenation plant contributed to the volume growth.

Profitability Under Pressure

Despite the revenue growth, Oriental Aromatics faced substantial profitability challenges:

• EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) declined by 18.5% to INR 181.00 crore.
• EBITDA margin contracted to 8.03% from 10.29% in the same quarter last year.
• Net profit saw a dramatic drop of 95.5% to INR 5.00 crore.
• Earnings per share (EPS) fell by 95.4% to INR 0.15.

Factors Affecting Performance

The company attributed the margin pressure to several factors:

1. Ramp-up of the new Mahad plant
2. Planned maintenance at the Bareilly facility
3. Temporary slowdown in specialty chemicals due to global geopolitical factors
4. Forex fluctuations impacting costs

Raw Material Stability and Future Outlook

Oriental Aromatics noted that raw material prices remained stable during the quarter. The management expressed optimism about margin recovery in the coming quarters as the Mahad plant reaches full capacity.

Segment Performance

The company's business is divided into several segments:

• Aroma Chemicals and Camphor
• Flavours and Fragrances

While specific segment-wise performance was not detailed, the company mentioned that there was a temporary slowdown in specialty chemicals due to global factors.

Geographical Sales Distribution

For the previous fiscal year, Oriental Aromatics reported a balanced geographical sales mix:

Financial Position

As of June 30, Oriental Aromatics had a market capitalization of approximately INR 12,834.00 crore. The company's share price closed at INR 381.35 on that date, with a 52-week high/low of INR 656.00/252.40.

Conclusion

While Oriental Aromatics demonstrated resilience with revenue growth and increased production volumes, the significant decline in profitability presents challenges. The company's focus on operational efficiencies and the expected ramp-up of its Mahad plant will be crucial factors to watch in the coming quarters as it aims to recover its margins and strengthen its position in the specialty aroma chemicals market.

Oriental Aromatics , a leading manufacturer of aromatic chemicals, has reported mixed financial results for the first quarter. The company's standalone performance showed growth, while consolidated figures reflected a decline in revenue.

Standalone Performance

On a standalone basis, Oriental Aromatics demonstrated positive growth:

• Revenue from operations increased to ₹225.13 crore, up from ₹215.76 crore in the same quarter last year.
• Net profit rose to ₹5.74 crore, compared to ₹11.64 crore in the corresponding period.

Consolidated Results

The consolidated financial results, however, painted a different picture:

• Consolidated revenue declined to ₹225.52 crore from ₹215.76 crore year-over-year.
• Consolidated net profit decreased to ₹0.50 crore from ₹10.98 crore.

Financial Highlights

Other Notable Points

• The company received ₹1.83 crore in export incentives from the RODTEP scheme.
• A foreign exchange gain of ₹1.04 crore was recorded during the quarter.
• Oriental Aromatics maintains a strong financial position with a net worth of ₹514.71 crore on a standalone basis and ₹540.71 crore on a consolidated basis.
• The total debt stands at ₹156.04 crore for standalone and ₹179.67 crore for consolidated operations.

Segment Information

The company operates in a single reportable segment, 'Fine Chemicals', as per the requirements of IND AS 108.

Subsidiary Performance

Oriental Aromatics & Sons Limited, a wholly-owned subsidiary, commenced commercial production at its greenfield manufacturing facility in Mahad, Maharashtra. The consolidated financial results include losses (net of deferred tax credit) of ₹5.25 crore for this subsidiary in the current quarter.

The Board of Directors reviewed and approved these financial results at their meeting. The statutory auditors have reviewed the financial results and issued their report with an unmodified conclusion on both the consolidated and standalone financial statements.

Oriental Aromatics continues to navigate market challenges while focusing on its core business of aromatic chemicals production. The divergence between standalone and consolidated results suggests that while the parent company is showing resilience, the group faces headwinds that are impacting overall performance.