Gem Aromatics Limited has announced the commencement of commercial production at its Dahej facility in Gujarat. The company disclosed this development under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, through an official filing dated December 11, 2025.

Commercial Production Launch

The company has commenced commercial production of cooling agents and clove products at its newly established greenfield manufacturing facility in Dahej, Gujarat. The production operations are being conducted under Krystal Ingredients Private Limited, a wholly owned subsidiary of Gem Aromatics Limited.

Advanced Manufacturing Capabilities

The state-of-the-art facility integrates advanced process technology and rigorous quality systems, enabling the company to deliver superior-grade, high-purity products tailored to the exacting requirements of domestic and international customers. The expansion strengthens the company's presence in niche, value-added segments, including cooling agents and spice-derived aroma ingredients.

Management Commentary

Mr. Yash Vipul Parekh, Managing Director and CEO, commented on the milestone: "The start of commercial production marks a major milestone for GEM Aromatics and reinforces our commitment to building future-ready capabilities. Our new facility enables us to deliver higher purity, greater consistency, and superior performance across our product portfolio."

He further added that the launch of cooling agents, along with upcoming high-value offerings such as Citral and Phenol derivatives, will further diversify the product portfolio and reduce dependence on Mint and Mint derivatives. With continued focus on innovation, sustainability, and next-generation aroma molecules, GEM Aromatics is well positioned for its next phase of value creation.

Company Profile

Established in 1997, Gem Aromatics Limited is a leading manufacturer of specialty ingredients, essential oils, aroma chemicals, and value-added derivatives. The company operates with a diverse portfolio of over 70 products spanning Mint and Mint Derivatives, Clove and Clove Derivatives, Synthetic and Natural ingredients, Citral Derivatives, Phenol Derivatives, Cooling Agents, Safranal and Damascones.

The company serves industries including oral care, cosmetics, pharmaceuticals, nutraceuticals, wellness, and personal care. Gem Aromatics holds multiple international certifications, including ISO 9001:2015, ISO 14001:2015, ISO 45001:2018, FSSC 22000, ISO 22000:2018, and ISO TS 22002-1:2009.

Gem Aromatics Limited, a leading manufacturer of essential oils and aromatic chemicals, reported a net loss of Rs. 2.60 crore for the second quarter of fiscal year 2026, as the company grappled with challenges stemming from US tariffs and changes in India's GST structure. The company's revenue for the quarter stood at Rs. 89.50 crore, reflecting the impact of these external factors on its operations.

Financial Performance

The company's Q2 FY26 results paint a picture of a challenging business environment:

For the first half of FY26, Gem Aromatics reported:

Challenges and Impact

The company's performance was significantly affected by two major external factors:

1. US Tariffs: A 50% tariff imposed by the United States led many customers to defer orders and utilize existing inventories, impacting export volumes.

2. GST Changes: Recent changes in India's GST structure, with Natural Menthol now taxed at 5% and Synthetic Menthol at 18% (compared to the earlier uniform rate of 12%), prompted buyers to reassess their blending requirements, resulting in a temporary pause in purchases.

These factors led to softer demand in Mint, Mint derivatives, Clove, and Clove oil derivatives, which are among Gem Aromatics' largest product categories.

Strategic Initiatives

Despite the challenging quarter, Gem Aromatics is taking proactive steps to mitigate the impact and position itself for future growth:

1. New Facility: The company plans to commission its Phase-II facility at Dahej by November 30, 2025. This expansion is expected to add 10,829 metric tons of additional capacity for phenol derivatives and cooling agents.

2. Product Diversification: Gem Aromatics plans to fast-track the introduction of new value-added specialty products, originally planned for FY27 and FY28, to offset the impact on its Mint portfolio.

3. Cooling Agents Focus: The new facility is expected to house India's largest Cooling Agent's unit capacity of over 500 metric tons per annum, along with dedicated lines for Phenol derivatives and Citral derivatives.

4. Financial Strengthening: The company has repaid Rs. 140.00 crores of debt, improving its leverage profile with the net debt to equity ratio reduced to 0.3x from 0.8x.

Future Outlook

Yash Parekh, Managing Director and CEO of Gem Aromatics, expressed confidence in the company's long-term prospects, stating, "With our diversified portfolio, integrated chemistry capabilities, scale, efficient manufacturing, global customer base, and innovation-driven mindset, we believe Gem Aromatics will deliver sustainable and profitable growth in the years ahead."

The company has set a target to achieve revenue in the range of Rs. 1,050-1,100 crore by FY28, with an EBITDA margin of 16-18%.

As Gem Aromatics navigates through these challenging times, its focus on expanding capacity, diversifying its product portfolio, and strengthening its financial position may help the company overcome current headwinds and capitalize on future growth opportunities in the specialty ingredients market.