Gem Aromatics Limited – Investor Presentation Summary

Key Operational Highlights

  • Manufacturer & Exporters of Essential Oils & Aromatics Chemicals with 3 decades of experience
  • 80+ products across categories, 3 manufacturing facilities, serving 20 countries globally
  • 240 domestic customers and 44 global customers
  • 13 scientists leading R&D efforts
  • Key business segments: Mint & Mint Derivatives, Clove & Clove Derivatives, Phenol Derivatives, Citral Chemistry, Other Natural & Synthetic Ingredients

Key drivers of operational performance:

  • Improved product mix in Mint business
  • Recovery in Clove business following raw material cost normalization
  • Progress in newer product verticals with customer approvals and qualifications
  • Expanded manufacturing capacity at Dahej plant (April 2026)

Segment-wise Performance

  • Mint & Mint Derivatives: Largest business segment with strong customer demand, used in Oral Care, Pharma, Nutraceuticals, Personal Care, Wellness
  • Clove & Clove Derivatives: Second-largest revenue contributor with strong margin profile, one of largest processors of Clove Oil and Eugenol in India by volume (FY25)
  • Phenol Derivatives: Diversified phenolic portfolio serving pharma, antioxidant and fragrance applications
  • Citral Chemistry: New products including Safranal and Damascone

Financial Highlights

Q2FY27 Standalone:
  • Revenue: Rs 92.4 Cr (↓6.1% YoY, ↑11.3% QoQ)
  • EBITDA: Rs 11.9 Cr (↑96.5% YoY, ↑39.8% QoQ)
  • PAT: Rs 8.9 Cr (↑116.6% YoY, ↑22.8% QoQ)
  • EPS: Rs 1.7
  • Gross Margin: 22.9% (improved from 17.7% in Q1FY27 and 14.0% in Q2FY26)
  • EBITDA Margin: 12.9% (improved from 10.3% in Q1FY27 and 6.2% in Q2FY26)
  • PAT Margin: 9.6% (improved from 4.2% in Q2FY26)
Q2FY27 Consolidated:
  • Revenue: Rs 104.0 Cr (↑16.2% YoY, ↑5.2% QoQ)
  • EBITDA: Rs 7.9 Cr (↑158.4% YoY, ↑137.9% QoQ)
  • PAT: Rs (7.0) Cr (↓171.9% YoY, ↑10.9% QoQ)
  • EPS: Rs (1.3)
  • Gross Margin: 25.4% (improved from 16.4% in Q1FY27 and 14.0% in Q2FY26)
  • EBITDA Margin: 7.6% (improved from 3.3% in Q1FY27 and 3.4% in Q2FY26)
  • PAT Margin: -6.7%
H1FY27 Standalone:
  • Revenue: Rs 175.4 Cr (↑0.3% YoY)
  • EBITDA: Rs 20.4 Cr (↑23.3% YoY)
  • PAT: Rs 16.2 Cr (↑52.0% YoY)
  • EPS: Rs 3.1
  • Gross Margin: 20.4% (improved from 18.8% in H1FY26)
  • EBITDA Margin: 11.6% (improved from 9.5% in H1FY26)
  • PAT Margin: 9.2% (improved from 6.1% in H1FY26)
H1FY27 Consolidated:
  • Revenue: Rs 202.8 Cr (↑14.5% YoY)
  • EBITDA: Rs 11.2 Cr (↓37.6% YoY)
  • PAT: Rs (14.9) Cr (↓375.4% YoY)
  • EPS: Rs (2.9)
  • Gross Margin: 21.0% (declined from 21.7% in H1FY26)
  • EBITDA Margin: 5.5% (declined from 10.1% in H1FY26)
  • PAT Margin: -7.3%

Drivers of financial performance:

  • Improved gross margins driven by normalization of Clove margins and favorable shift towards higher-margin products
  • Higher depreciation of Rs 9.5 Cr in Q2FY27 and Rs 18.7 Cr in H1FY27 post capitalization of ~Rs 265 Cr Dahej capex
  • Early stages of Dahej facility ramp-up affecting profitability

Key Risks:

  • Elevated depreciation relative to current operating volumes during facility ramp-up
  • Raw material cost fluctuations (as seen in previous quarter with Clove)

Geographical Revenue Split

  • Domestic customers: 240
  • Global customers: 44 across 20 countries
  • Proposed Brazil subsidiary approved in June 2026 to enhance distribution reach in Latin America

Balance Sheet Snapshot (Consolidated as of Sept-26)

  • Share Capital: Rs 10.4 Cr
  • Reserves & Surplus: Rs 424.4 Cr
  • Shareholders' Funds: Rs 434.9 Cr
  • Long Term Borrowings: Rs 39.7 Cr
  • Short Term Borrowings: Rs 219.0 Cr
  • Property, Plant & Equipment: Rs 244.5 Cr
  • Inventories: Rs 321.7 Cr
  • Trade Receivables: Rs 54.0 Cr
  • Cash And Cash Equivalents: Rs 16.0 Cr
  • Total Assets: Rs 735.7 Cr

Financial Health Insights:

  • Working capital increased with inventories at Rs 321.7 Cr and trade receivables at Rs 54.0 Cr
  • Net debt position with significant short-term borrowings of Rs 219.0 Cr

Capex & Cash Flow Health

  • Dahej capex: ~Rs 265 Cr capitalized (total planned capex ~Rs 270 Cr)
  • Investment via internal accruals & debt
  • H1FY27 Net Cash From Operating Activities: Rs (81.3) Cr
  • H1FY27 Net Cash From Investing Activities: Rs (15.0) Cr
  • H1FY27 Net Cash From Financing Activities: Rs 101.0 Cr
  • Cash & Cash Equivalents at End of Period: Rs 12.7 Cr

Strategic & R&D Initiatives

  • Krystal Ingredients Pvt. Ltd. (wholly owned subsidiary) with ~Rs 270 Cr investment at Dahej
  • Next-Gen vapor phase technology for sustainable manufacturing
  • Focus on high-value specialty molecules: Cooling Agents, Safranal, MEHQ > BHA, Damascone, Guaiacol, Eugenol Derivatives
  • 15% corporate tax rate under government incentives in perpetuity
  • Capabilities for CRO, CMO and CDMO models
  • Strategic location near phenol supply, Mumbai-Delhi Expressway, and Jawaharlal Nehru Port

New Product Vertical Update:

  • Cooling Agents (GEM Cool 05 and GEM Cool 23): Customer audits completed, initial trial orders received, shipments commenced, initial revenue expected in Q3FY27
  • Safranal: Production commenced, initial revenue expected in Q3FY27
  • Phenol Derivatives (MEHQ): Initial trials completed, production commenced, revenue expected in Q4FY27

R&D Capabilities:

  • Dedicated in-house R&D facility in Maharashtra
  • 13 qualified scientists with advanced expertise
  • Expertise in Grignard reactions, amide coupling, Friedel-Crafts, cross-coupling, photochemistry, green methoxylation
  • Sustainability focus: effluent-free, vapour phase reactions, solvent minimisation, catalyst recycling

Industry Trends & Business Environment

  • Products used in Oral Care, Cosmetics, Nutraceuticals, Pharmaceuticals, Wellness & Pain Management, Personal Care
  • Global market opportunities for specialty ingredients
  • Expanding international presence with Brazil subsidiary

Management Commentary & Growth Outlook

  • Focus on utilizing and monetizing expanded manufacturing platform at Dahej
  • Scaling newer product categories through Krystal Ingredients
  • Continued progress in customer engagement and product qualification
  • Innovation and R&D remain central to long-term strategy with focus on process innovation, product customization, and higher-value specialty molecules
  • Strengthening international presence with Brazil subsidiary enhancing distribution reach in Latin America
  • Committed to disciplined execution and sustainable value creation
  • Focus on progressively scaling Krystal Ingredients' Dahej facility, strengthening product capabilities, and expanding presence across global markets

ESG Updates

  • Sustainability focus in R&D: effluent-free processes, vapour phase reactions, solvent minimisation, catalyst recycling
  • Green chemistry approaches implemented

Digital Transformation

  • Not specifically detailed in presentation

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