Camlin Fine Sciences Q2 Results Review - Better Than Estimates; Multiple Variables At Play: Nirmal Bang

Nirmal Bang Report

Camlin Fine Sciences Ltd.'s Q2 FY23 Ebitda came in significantly ahead of our estimate mainly on account of improved margin delivery in India operations following ramp-up of Dahej operations. Dahej is operating at ~85% utilisation.

Margin pressure due to rising salience of catechol, which is in excess supply, was largely offset by selling higher volume of downstream products.

The management indicated that going ahead, its incremental focus will be on scaling up multiple such products. Vanillin facility commercialisation has been delayed on account of some pending regulatory approval. At peak, Vanillin capacity can contribute ~Rs 7 billion to the topline and improve blended margin.

Overall, blends business is stable across geographies and it is not witnessing demand shrinkage.

However, geography-wise, there are macro specific concerns like currency depreciation in Brazil, energy crisis in Europe and inflation and recessionary trends across the globe, which could have an adverse impact on near term demand.

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