Financial Performance Highlights

Q2 FY27 Performance:

  • Consolidated revenue from operations: ₹636 crore (15% YoY growth)

H1 FY27 Performance:

  • Consolidated revenue: ₹1,299 crore (14% YoY growth)
  • EBITDA: ₹168 crore (33% YoY growth)
  • EBITDA margin: 13%
  • Gross margins remained broadly stable amid raw material price volatility

Segment-wise Performance (H1 FY27):

  • Fragrance segment revenue: ₹1,088 crore (11.9% YoY growth)
  • Underlying Fragrance growth (excluding ₹50 crore low-margin business exited in Q4 FY26): ~14%
  • Flavour segment revenue: ₹184 crore (47% YoY growth)

Balance Sheet and Working Capital

  • Net debt as of September 30, 2026: ₹911 crore
  • High inventory levels maintained to ensure supply continuity amid global sourcing uncertainties
  • September debt level expected to represent peak for the year
  • Reduction anticipated by March 2027 through inventory optimization
  • Objective to progressively improve cash generation and reduce debt year-on-year

Capital Expenditure Update

  • European factory capex completed and fully operational since May 2026
  • Indian Fragrance factory renewal expected to complete by end of FY27 (Q4)
  • Transition from Mulund to new factory expected in FY27-28
  • Second factory expected in Vanavate/Vashivali, likely operational in Q4 FY28
  • Remaining capex for FY27: ₹30-35 crore
  • FY27-28 capex: ₹75-80 crore
  • Sustenance capex: ~₹15 crore annually

International Market Development

Development Centers (CDCs):

  • U.S. market: Generating revenues (small numbers), expected to take 2-3 years to ramp up
  • Germany: First sales achieved
  • U.K.: First sales achieved
  • All CDCs fully manned with no further investment required
  • Total CDC spend: ~₹80 crore (not generating meaningful revenue yet)
  • Expected breakeven timeline: 3-4 years
  • Meaningful returns expected in 7-8 years

Southeast Asia Operations:

  • Jakarta factory fully operational since September 2025
  • Showing good growth with improved lead times

Demand Environment and Outlook

Management Guidance (Medium-term):

  • Revenue growth target: 12-13% annually
  • EBITDA growth target: 13-14% annually
  • EBITDA margin target: 15%+ (expected in 12-18 months depending on inflation)

Market Conditions:

  • Fragrance segment: Broad-based growth across geographies
  • Flavour segment: Sustainable 20% growth expected (Q1 had one-off inventory buildup)
  • Domestic market: 9% growth reported (5% cost growth, 4% volume growth)
  • Underlying domestic growth (excluding exited low-margin business): ~12%
  • Larger clients showing better growth than smaller clients during inflationary period
  • Middle East market growth lower than previous years due to geopolitical situation

Risk Factors:

  • Geopolitical developments in Middle East
  • Raw material price volatility
  • U.S. midterm election outcomes and policy changes

Operational Metrics

  • Interest cost: ₹17.5 crore in Q2 (expected to remain at ₹16-17 crore per quarter in H2)
  • Depreciation and amortization: Annualized range of ₹145-150 crore
  • Amortization of European acquisitions (2018) will start reducing from 2028 onwards (10-year amortization)

Insurance Claim

  • Expected to be closed by March 2027

Business Strategy

  • Focus on consolidating global capabilities in Europe and America
  • Leveraging innovation capabilities and scientific expertise
  • Continuing research in proprietary molecules, formulation technologies, and sustainable ingredients
  • Targeting midsized and smaller clients in developed markets where market share is increasing
  • Combining global technology advantage with agility of smaller companies

Market Context

  • Global Fragrance market in Europe and America: ~$10 billion revenue opportunity
  • Company positioning: Competing with midsized companies with global technology offerings
  • Industry trend: Consolidation creating opportunity for midsized players