Camlin Fine Sciences Limited (CAMLINFINE) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the Camden Fine Sciences Limited Q4 and FY26 Earnings Conference Call. Before we proceed, this conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involves risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touchstone phone. Please note that this conference call has been recorded. I now hand the conference to Mr. Ashish Tandikar, Chairman and Managing Director, Kamleen, Pai Sciences Limited. Thank you and over to you, sir.

Thank you. Ladies and gentlemen, welcome to the Waters earnings call. We know your time is precious, so we will immediately begin the relevant portion. You will note, amongst all the noise that is happening around the world, that we have been on a very consistent strategy implementation for the last two years, three years, and you will see the progress in the numbers and in explanations. So, without anything more, I will hand over to Santosh Parab for his brief.

Thanks, Ashish. Good evening, everybody, and thanks for attending our earnings call. I'll just start with a brief on what is happening around the world. Everybody knows, but there has been some impact on our business in this quarter. This quarter, the sale was impacted by around 20% due to delaying shipments, lack of ships, and increased voice time to our markets across the globe. This conflict also has affected the availability and prices of some of our raw materials. The longer delivery time has also impacted our working capital cycles, and that positive of working capital cycle has also percolated in some ways on the pushing of our business and growing of our business in some of the geographies. With this, we clocked around 424 crores of revenue in this year. The total revenue is 1723. We have to note that we have some. Disclosures on discontinued operation on which I will talk later, which have been shifted from the total revenues to a discontinued business since the nine-month revenue and as well as last year's revenue is looking like it has reduced, but it is a disclosure. The revenues have been made in this quarter also. We had seven to eight rows of revenue. It had to be shown as discontinued business. And the total revenue of 1723 is also lower by around $54,000. I will now come to the segments, our segments. The states business, we have been able to hold on to our market share. However, due to local competition and pricing pressures, This is the... Revenue from states has reduced a bit. Of course, it was also helped by increase in the dollar prices, but the local competition has impacted us, states. Having said that, we changed our strategy of... Trying to use more of these states for making blends rather than competing it with the local Indian competitors. We have been trying to blend these states into blends business. And hence, some of the state sales business have moved to the blends business. In blends, we have shown that has been the hallmark of our revenue in last few years, and we have maintained the steady growth. We have been saying that we will be doing around 20%. We have clocked 17%. If we add the discontinued business of blends business of Europe, we would have grown by 18%. We missed the target of 20% primarily because the projections of WinFi, which did 10 crores in the first month, was only able to do around 17 crores in the last three months. As I said, the working capital cycles and the liquidity crunch has impacted their business. But we are confident that it will come and it will give the results which we have been talking about in WinFi. Going forward also, blend business is looking good. I will tell you about it after some time. The vanillin aroma portion, we had. I told you last time that we have changed to the ethyl venlin campaign and we stopped the production of ethyl venlin and we were not modification but changing over our ethyl venlin plant. It took around two months. Then we started ethyl venlin plant. So, largely, there was a very small portion of methyl when it produced in the quarter core. It's around 110 metric tons. But we did have internal channel stocks. We had sold and we were holding into some inventories in U.S., especially looking at the tariffs. We have delayed some of the inventories and hold those inventories to reduce the tariff impact. So, internal channel stock, the entire sale of Vanolin, which is being appearing through four years, largely through the internal channel stock, which will be liquidated. We also have some internal channel stock still remaining of Nital Vanolin, which will help us in the coming quarters. Of course, with ethyl, vanilin, we have. We have orders on hand for the quarter one of around 300 metric tons. The plant is running well. We will be taking a campaign of around 600 metric tons of methyl vanine. So we have enough methyl vanine to, not enough, but a fairly good stock of methyl vanine to not allow the market to try. Of course, and the tariff withdrawn, there would be higher realizations. We have started looking the green shoots on that. We did, the channel tech was sold in the last month, and our average realization for the company for the vanling had gone up from sub-11 to more than $12.5. In quarter four, and we are quite confident it will grow, obviously, because of no tariff there, only 15% tariff is there in U.S. and Europe. This higher value realization will also benefit us in the next quarter. I would have seen that we also had lodged the claim after the withdrawal of tariff by the Supreme Court Order. We did have, we had paid around nine hours of duty through the customs till February, which we have applied for the claim, and that has reduced our cost because the payment of duty was considering the cost of goods sold, which we have now reduced. We are confident that this claim will be received. These have been launched and accepted by the authorities. If you see the overall cost also remain under control. As far as employee cost is concerned, we have been saying that we will be investing in human capital to help us grow the business, especially in the blend sector, and we are really looking at it. Exponential growth in Blanche's business. And last two years, if you see, we have been investing into employee cost. And that's the main, one of the main reasons for the increase in employee cost. Of course, WinPie also came. For four months, this entire quarter results also incurred revenues and expenses of WinPi for the whole quarter. Last quarter, this was only one month. That has also pushed the cost. Overall costs also are under control, but for the freight costs, which has increased in the last six months and some of the other costs, but WinPi also has contributed to increase in that cost. Resultantly, the pottery bid has been 21 crores. It's 5%. I think in the given circumstances, it's not a bad performance. Obviously, going forward, currency fluctuations will impact the business, but for us, we will Dollar sales in dollars, it should positively impact and it may increase our revenues to such extent that we will be able to absorb the increase in the cost of the raw materials. Of course, it may not be entirely, but we can recover the cost. Uh, this year, this quarter, we also, uh, I, I, uh, Liquidation of CFS has happened. We received the order, a liquidator order, and the accounting entries has been done. There is a gain booked on loss of the company, which is around 100 or so, which we have booked this quarter. One good thing about this is the cash burn on this discontinued operations of around. 50, 60 crores every year is going to come to zero from next quarter. And that's a big cost saving. China still remains under liquidation, but we don't think the cost will be more than 7 to 8 crores next year. Just quickly on the outlook for the next year or the subsequent quarters, Van Lien, as I said, will improve its realisation. Volumes are also likely to increase, but yes, we have to see the lingering conflict situation, how it acts. Blends, again, as I said, we have invested into the human capital. We already have the full position to now push the blends for higher growth. In the first month itself, we have lost more than 100% of global blends business, and that run rate is taken, you can just see the kind of growth we are looking at blends. Obviously, we have also, last Friday, we had an unfortunate incident, though it was not a fire at the hedge plant. Fortunately, because of our responses in quick and safety measures been there, if the fire didn't spread to all the plants, we were able to contain it. There will be some loss, but we will be, we have adequate insurance for. In fact, we were planning to close down the plant, shut down the plant of diphenol, especially with the price, as you know, our basic raw material price is 85 rupees, is now being quoted at more than 150 rupees per kg, and the availability is also not consistent. So, at present, we are getting it, but we are not sure. If the conflict lingers, how it will look like. So we had taken a conscious decision that we should reduce the cash one because of the high pricing and lower realization in category. We had already secured hydrogen from China, which is at a very reasonable rate, and we would save by purchase rather than manufacture. Which helps us to keep our downstream of safe running. Catechol, we already have enough stock because the plants were running at 60-70% last year, and it was not matching the consumption or not enough for the vanillin, and hence we have enough stocks in the system of catechol which can sustain 8-9 months of our vanillin production. So, I said that things look good. We will be looking at how to use or repurpose this diagonal plan. We have to also look at how the prices move. What will be the chromatical prices of diphenyls, how the competition is looking at it, how the Chinese are responding to the whole situation and also the conflict. And soon we will take some decision and decide on the path of the diphenyls. Having said this, I think I will open this forum for questions.

Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants, you are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue is sent. A reminder to all, you may press star and 1 to ask a question. We will take the first question from the line of Raman KV from Sequent Investments. Please go ahead.

Hello, sir. I just have some doubts. One is with respect to diphenol prices, which you said have increased drastically from $85 to $150. This is a raw material for production of what, actually? Can you help me?

Yeah, so diphenol is the product which we manufacture. Diphenol is nothing but hydroquinone and catechol. I was talking about the raw material phenol, which was generally 85 rupees for last, just before the conflict. Now it has gone up to 150. So naturally, the cost of production of our product, hydroquinone and catechol, has drastically increased.

Okay, understood. And catechol, we are manufacturing internally, and hydroquinine, we are supplying it from China, right?

We manufacture hydroquinine and catechol together as diphenols. Okay. If we stop the diphenol plant, both of the products cannot be manufactured. I was saying that hydroquinone we used to use entirely for our state's production, valuating it. That hydroquinone we will be importing. As far as catechol is concerned, because vanillin plant has not achieved enough capacity utilization last year, we are carrying enough catechol, which can... Help us to produce vanillin for next eight to nine months. And that category will not be importing. We will be importing hydroquinone for our downstreams. And that hydroquinone we have already secured from Chinese manufacturers for next quarter.

Okay, understood, sir. So basically, we don't have any direct impact of this sudden rise of penal prices.

Yes, we are trying to make or buy. It's a simple thing. It's better to buy now the raw metal than making it at higher cost. So you're right in that sense. And we are buying Madrukinan so that our real downstream sales of seeds and vanillin, we are able to keep that sale and at a reasonable margin than producing it at present.

Okay, sir. And the one from the PPT, I can from the obviously from the report result and the PPT, I can see that we have 85 crores gain from discontinued operation. Can you just elaborate? What is this?

As you know, I just mentioned that we have this CFS Europe subsidiary which was liquidated and there were certain loans in that. A subsidy, which has been Booked as a gain on derecognition of CFS Europe. And that's what has come. It's around 95% of loan, but the credit is lower because there are some discontinued business and the losses are in which have been adequately explained in the notes. So, this discontinued business, the credit is largely on account of the loans which are de-recognized from the financial statements. For the on liquidation of CA-Precibo.

And with respect to vaneling, you have mentioned that the internal channel stock of vaneling has been liquidated at the end of quarter four. So now can we expect our realization to move upwards given that the inventory has been liquidated at the same time the U.S. status has reduced from 50% to 25%.

So, as I started with saying that we had taken a campaign of ethyl vanillin. We had two vanillins, methyl and ethyl. Till now, we were producing methyl and selling methyl. We had a good order book of ethyl vanillin, and hence, we wanted to produce ethyl vanillin. For that purpose, we had to take a break of methyl vanillin. We stopped the production of methyl vanillin from 15th of January. So, there was hardly any production here, but we have sale of vanillin. And that sale of manlen is from the internal channel stock. In the sense, the material which we have sold to US to our subsidiary was carrying the stock. So that channel stock has been sold in this quarter, and that's why you can see the revenue. And still, we are carrying internal channel stocks. Which will be sold in the subsequent quarter, and we will also be selling Ethyl Valenins, which the campaign has started and the production we have got from April. So in April, in the Q1 quarter, we will be selling Ethyl Valenins, which we are producing now, and we will be selling some channel stocks, internal channel stocks of Ethyl Valenins. Now, coming down to prices, you had that last point. Yes, the tariffs have gone down. Naturally, we were impacted. The basic prices in the U.S. have not moved. We are $18, $17.50, $18 in U.S. Because the duty was at our cost, we had to sail from India at $11, $12. Now, duty reduced, our realizations will increase. In fact, as I said, our realization moved from sub-11 dollars in the last quarter to almost 12.5 plus dollars in this quarter. And naturally, the realizations are better. Realizations will increase in the next quarter.

Sir, just a follow-up on this. Is there any realisation difference when we compare methyl vanillin to ethyl vanillin? I just want to understand the rationale behind switching from methyl vanillin to ethyl vanillin.

Generally, methyl and ethyl, the customers like to have. Ethyl is a more stronger note product. So, its consumption is lesser than methyl vanillin, but the customers ask for methyl vanillin also, and they are happy if the supplier is able to sell both the vanillins. Now, having said that, this methyl vanillin's price difference generally is one to one and a half dollars more than methyl vanillin, but our cost is also almost one and one dollar more. So, either I sell methyl or ethyl, my realizations are the margins per dollar per kg remain the same.

Understood sir. Understood. Thank you sir.

Thank you. We will take the next question from the line of Roshikesh Shah from Alchemy Capital. Please go ahead.

Yeah. Am I already?

Yes.

Yeah. Thank you for taking my question. Sir, I wanted to know what would be a banal in sales this quarter?

In quantities or value? In quantity. The quantity of anilin we sold. Around 325.

Sir, if I remember correctly, in Q3, you had mentioned that we had 200 tons of vanillin, which we had held back. So, I thought this photo, we might see a better volume sales. So, what would be the reason for only 325 crores? I know that we had to hold off our production, but still we had 650 crores in channel, 650 tons in our channel with subsidiaries and everywhere. So, I think our volumes would have been better, right?

So, I'll just put the same number which you said we talked last in February. By that, we had done 100 tons. We said that we'll be doing 200 more tons by holding back the stock and trying to take the benefit of realization at 300. And as I said, I'm still carrying around 300 tons of value stock in the channel to sell in quarter one. That's how it's 600 works out. Right, okay.

So, okay, got it. Sir, my second question was, if we look at our profitability, how much of an impact would you say this Middle East crisis had on our EBITDA? See, because if I remove the 10 crores or 12 crores of tariff rebate that we have got, then EBITDA would have been around 10 crores. So, it is only 2.5% emitter margin, FY27, we have guided for double digits. So, what do you think? Would there be any change to our guidance, revenue-wise and margin-wise?

So, I'll explain to you, the Middle East crisis has impacted our sales by about 50 crores or so. As well as, as Pantosh mentioned earlier in his opening remarks, that the WinPi acquisition, there was an EBITDA loss, a loss at EBITDA level of 10 crores. It was due to some liquidity issues which WinPi had, which, of course, we are addressing. So if you combine these two, our EBITDA should have been higher by about 30 crores.

Okay.

And we are not changing our guidance for FY27. They are guiding on the same line.

Right. Answer this right now. See, now let's say our tariffs are down to 18% and we are able to sell it at $18. E-tile would be at $20 or something. So what would be our blended realization we can take for FY27?

So, I think it will be around in the range of 13.5 to 14.

Okay. And I have a question on the blend side. So, Vita4, what would be the EBITDA break-even we can expect at what level you can get?

Yeah. So, Vita4 is at 16 million for the whole year. And so is VinPi is also at the same level, 14 to 16 million.

Okay. Okay. I'll come back if I have any other questions. Thanks a lot.

Thank you. We will take the next question from the line of Avalish Diwadi from Vekaryo. Please go ahead.

Hi. Can you explain or understand your debt levels at March 26th? How do you plan to manage your cash flow in fiscal 27 in terms of how much you expect from operations and any other sources to meet your debt payments and working capital requirements as you're growing the business again in 27?

So, last year we had, we started with around 620 crores of debt. Our business was increasing. We did take some debt in India of around 45 crores on working capital, which is an increase. If you have seen, we have also borrowed 30 crores for our WinPi open offer. We borrowed at the year end. On a global basis, WinPi was added to the whole kitty this year. It was acquired. It had around 6.5 million of loans in its books. So that was 60 crores orders increased because of that. But however, the increase in the total loan is only by 50 crores because we knocked out. Around 85 crores of Italian loan. So at the end of this year, we have around 670 crores loan. Out of that, we are carrying 30 crores in escrow, which is for the WinPi open offer. Having said that, this 670 crores, the whole repayment for the whole year on a consolidated basis, around 60 to 70 crores. We think that it could be managed. There will be some stress on if our turnovers increase. At a faster rate, we will require additional liquidity and additional support. We are looking at some kind of support from the market on debt for the growth as well as stabilizing the current business and have some cash to tide over this conflict situation. It's better to have some cash. So, there could be a longevity of the working capital if the concrete lingers.

Right. So, are you looking at some degree of capital infusion just to make it even more resilient so that you can pursue your growth plan?

Capital infusion is the last resort. We are in the market for debt at this moment. So that looks like a better option. But we know that the times are difficult and that's why we have kept that door open and we have seen that we have increased our authorized capital to some extent in the month of March. But at this moment, equity inclusion is really a loss, not on the table at all.

And is debt, you're looking at, this is a simple plain bank debt or this is more structured, a bit of a high yield debt between equity and debt?

Looking in a combo, because we have large, now, network of our companies all over the place. So looking at the nature of that, if you see in India, I'll go for a structured debt. So for example, if I borrow in Mexico, it will be more of a bank debt. So, we will be looking at a combo. We have kept all doors open. As you know, the times are difficult, especially to have cash from the market, right, in that situation. So, largely structured, well, in this situation, but we are also looking at the back plan.

And do we have some sort of a sense or range what cost it would come at?

It's very difficult now, because it will be access, the guy who gives structure finance is going to access my risk. But he will try to keep it as minimum as possible as the market rates.

Got it. Second question, I had an industry cycle. You were talking about inventories in the channels reducing in US, and then maybe getting your volumes back in US. How is that situation when you think you can get your volumes strongly going in US? This is for the Vanlin business? Yeah, Vanlin business, yeah.

Yeah, the Vanlin business this year, as we've said in the past, our estimate for FY27 in the U.S. will be around the 2,200 to 2,400 metric tons, and we are on stream to achieve that That's both methyl and ethyl together. So, we have several businesses already contracted and some being contracted. So, I think that 22 to 2400 is what we are looking at for this year.

Will it be more coming in second half, or even Q1, Q2 can also see a strong pickup, whether in Q4 was adjusted to 300 plus tons?

Yeah, so Q1 also will show some pickup in the U.S., but the total combined between U.S. and Europe, Q1 will show some growth over Q4 of last year, over 5.8 years.

Got it, and then it will keep picking up to meet your guidance.

Yeah, get it. That's fine, yeah. Thank you. Thank you.

Thank you. We will take the next question from the line of Reha, from Kohir and Bell. Please go ahead.

Hi, thank you for the opportunity. I had a couple of questions across the business. What is the tonnage or catechol inventory we are sitting on in terms of for now?

So it's about in the region of about 3,000 ton.

So that, in terms of vanillin yield, is how much approximately between methyl and ethyl? Because I know the yield would be different because of catechol. Sorry?

Yeah. So it's about 1 is to 1. Roughly for a calculation, you can take 1 is to 1 for both, for methyl and ethyl.

Okay, and considering our guidance for FY27 has been about 70% utilization, so that would be about 4,000 to 4,200 tons of vanillin, where would the balance 1,000 come from? So we'll buy from China. So you'll buy catechol from China? Yeah, either catechol or y-catechol. Okay, and then you'll blend it here and do the needs for it?

Yeah, then we'll do it here. Then the final step, I mean, whatever, the vanillin manufacturing is done.

Understood. And the tariffs currently, as per my understanding, is 10%, not 18%, right? Because of the...

15%. So, there's a base 5.5% duty, and then there's 10% tariff across the board. So, 15.5%.

So, your current realization would be about $16 in US at the moment?

No, because the GDP pricing today in the U.S. market are compared to science, so it's selling at about $17 to $18. So there is a holding cost and the tariff cost and some channel financing costs. So all of that gives us net realization would probably be in the region of about $13.

But I think a couple of quarters back, we had seen prices timed at 19, 19 and a half dollars.

Correct. Yeah. So, but science was trying to saturate the market. I mean, get the Chinese out of the market completely. And they've taken this position of pricing and we can't price higher than them. So, we kind of maintain pricing along with them. But I think in the next quarters, we have no choice but to increase the price. And that's what we are thinking that. They would look at increasing the prices to the $19 to $20.

So your pricing for Q1 as on blended across Europe and U.S., realization would be about, like in-hand post, tariff would be about closer to $14?

Yeah, $13.5, $14 in that range.

Okay. And because it's been almost a year since, you know, the ADD came in, are we now seeing that now is the channel clear because prices should have been north of $20 by now, excluding ScienceCo. Even them, I mean, I'm wondering how is with this inflationary scenario.

Yeah, it's surprising what they're doing, but I think we expect them to change their position in the next couple of months. They will increase it because they've kind of... So, you know, the capacity utilization would be at 100% by then. So, naturally, they'll have increased the prices.

And the cost currently that the company is incurring because of employees, is this, as we had discussed earlier in the February concord as well, this is the peak, right? Now we will let the business stabilize a bit because you've done two acquisitions, you have a new facility coming on stream, which is abandoned. So now is this the peak hiring? We're not seeing more increased employee expenses on the P&L?

Yes. No. So I don't think there will be significant changes. It will be in this region.

So then do we, I mean, considering you moving from manufacturing to, you know, importing and then doing your value addition here with vanillin scaling up and blends in its nature is already acid-like. Are you on track to deliver about 330 crores of EBITDA for FY27? Because vanillin alone at your current realizations of 13.5, 14 should give you 200 crores of EBITDA.

Yeah, so the way we are seeing it is that... On the top line, we should be in the region of between 22 to 2400, and EBITDA margin would be between 12 to 14 percent on overall basis. So that's the swing. Of course, we do have a plant which we are trying to look at what to do with making it multipurpose and see if we can reduce some of the costs on our raw materials as well. So, there are different programs which we are working on. That's why the range would be between 12% to 14% in terms of EBITDA. And top line also would be in this range of 22% to 2400.

So, going forward, we don't have any European losses. The Chinese losses, I think, are about 8 crores odd annually, right? Which is about 1.5 crores, 2 crores a quarter. And considering you have about 300 tons of stock in Van Den plus a 600 metric ton campaign, So, are we moving back to double-digit margins in Q1 onwards at least? Because Q4, we expected some sequential performance, but I think we've slipped further because of the geopolitical tension.

So, Q1 is difficult to say because we did have manufacturing of the IC0 until the 22nd of May. When we discontinued, and we started getting material from China, which now we are consuming. So, the full impact of that will really come in Q2.

But you would also have phenol inventory, right, which would give you some inventory gain.

No, no, no. No, phenol, we don't have any inventory because it's just in time because it's next door. So, we have, we don't keep any stock, we just keep, it's just in time, it's applied.

So, are we, in Q1, are we going to maintain these 48% gross margins, or are we going to slip down?

Because, I mean, if you're going to do 4,000 times, we'll maintain, we'll maintain that margin, there could be 1% up or down, but we should be able to maintain that margin.

Because at 700 tons of vanillin alone, I mean, sorry, not 700, at 1,000 tons of vanillin, even if I take it as a quarterly phenomena, I know it's not that way, but if you have to even average it out just for simplicity, that alone should give you back to your old numbers, right? I mean, at 13.5, with this current rupee depreciation, even if your cost of manufacturing is 9, 9.5 dollars, all inclusive, you're at 360 rupees a kg. At 1,000 tons, that's automatically 36, 37 crores of EBITDA. So, I mean, I'm just not understanding the numbers, if you can help me understand the same.

So, again, the raw material costs have gone up, right? The $9 is no longer $9 because phenol costs and all other raw material costs have gone up in the current situation that we are seeing. So that nine, nine and a half assumption was prior to the war. After that, of course, with all these costs increases, your realization has not gone up, but your cost has gone up for vanillin. So, when I look at vanillin, I would say you're baking about... You know, but this

catechol is old invented, as Santor also mentioned, that 3,000 tons has not come now.

But catechol is only a quarter of the raw materials. There are other raw materials as well. So, for example, glycemic acid, caustic, caustic is actually equal in value as catecholid, and that has gone up by, you know, literally doubled up in the last, after the war situation.

The total cost of the cost is still to be 7.5 pre-war, with around $2 of catecholid. So, you can just imagine there are a lot of other numbers that are going. Which can really get impacted by the geopolitical situation.

So today, what is your, at current pricing, even, what is your cost to make, at 4,000 tons, what will be your per kg cost of vanillin?

So my raw model cost, even if we hold on to the credit call, and we assume that around 20 to 25% increase in cost. So if I knock out $2, $1.50, $2 from my total cost of $7.50.

So today, is it $10 or $9.50? This is on the same, madam. No, what is the current cost of per kg of vanillin at these levels?

Yes, that's what I'm saying. So the raw material cost, which was $7.50. has gone up by at least $1.20. So it's almost $9 is a raw RMC. Plus your conversion cost at 4,000 tons, if you were to look at your conversion cost, it would be at $1.50. So you're at $10.50 of base cost. And your realization is $13, $13.50. So you're talking about $3 spread. On a 800-ton, in the first quarter, you're looking at 22, 23 crores coming from. They're not 35, 36, what you're making.

Sorry to interrupt in between. Rehan, I would request you to please rejoin the queue again for more questions as we have participants waiting in the queue. Thank you. We will take the next question from the line of Surya Patra from Philip Capital. Please go ahead.

Yeah, thank you for this opportunity. Sir, my first question on the, let's say, the base business, CBS to BSA and all those kind of things. So, the kind of price, pressure, competition. Also, the kind of a recent in general rise in chemicals prices because of the worst situation what we have seen. Given those backgrounds, what is the kind of outlook that you would be having on that the state's specialty ingredients as well as the specialty the state's business?

So, in the trades business, Some of the cost increases, we will be able to pass on, and we are passing on. TBSU prices have corrected and have gone up to reflect that. BHA pricing also is likely better than it was pre-war. So, in terms of passing on the increase of cost, With the lag, we are in track to be able to pass it on. So I don't see a problem with that. As far as volume is concerned, I think we are gaining a lot of market share also in the blends business where our TBH2 and BHA consumption, internal consumption is growing, which also is giving us some economical scale in terms of production of TBH2 and BHA.

So, whether the outlook for 27, it would be positive, or how should one really think so?

For TBS to BHA, it is positive, yes. For TBS to BHA, it is positive, the outlook.

And from the performance chemical point of view, it would be?

We don't have much of performance chemicals. We don't have much now. And now, with catechol, I mean, after stopping the diphenol production, The performance chemicals will be very small part. They're not selling, you know, we were making hydroquinone and selling some hydroquinone also in the market. So slowly all of that will go. So we're not, really the focus is not on that. Okay.

Now, the second question is on the supply chain issue practically that you would be seeing currently. So, there was an obviously difficult situation. Whether the host is behind now and Q1 onwards, should we see a kind of improved supply situation for us? Or there would still be some challenges relating to some particular input, if you can highlight that.

The problem is, as you know, in the supply chain, the bigger problem is logistics. And that is very, very unpredictable because what looks like 20-day shipments are taking sometimes 40 days to come or 50 days to come. So that uncertainty, till this geopolitical situation settles down, will remain. And very difficult to predict whether that will very quickly correct or, you know, it will take maybe a few months to correct.

Surya, the worrying remains, because even if the situation is, I don't think the logistic guys will immediately come down. In fact, tomorrow morning, I am meeting one of our guys, we can't, so he's a big logistic guy. He's coming, and I know why he's coming. He wants to increase the price. The cost, the cost if you compare pre-war and now. In fact, pre-war also the cost was increasing of threat. The cost, as far as we are concerned, where we put almost a lot of material across the globe in the American continent, both north and south of it, the cost are almost three times. And yes, you can always say why it's not here, but it doesn't work like that. So I don't think even if tomorrow the war stops, this thing is going to get unwound in a day or a week. We feel that this will linger on for some time, at least it will take a quarter to come back to the normal situation.

So then H1 of F527 is a continually impacted period for the business generally, theoretically, that is what one should believe, right?

So how this pans out on cost basis, I feel that the cost of trade mill is in high. Even if the war is over and the crude remains as 100, then there is no respite, right, for the crude stock. So it's very unpredictable. The question is if the crude is 100, how much I can pass it on to my customers, right, and how much I may have to bear from that. It's a very difficult calculation to say. I feel that even a stable growth of 10-15% over these two quarters is great. Really great.

Okay. So, about vanilla business, you have talked about it already. So, since the tariff, U.S. tariff was not there, or almost a near normal kind of tariff situation that has been there in some time, and so, and this is a kind of year-end situation, and normally the order book build-ups your time also. So, any order book build up that you have seen for FI 27 and hence that confidence that ok the certain quantum of the supply that is definitely possible irrespective of the pricing or the cost equation. And also, yes, sir.

Yes. So to answer that, we started with the ethyl vanillin campaign, and the campaign is for 600 tons, and we already have an order book covering 50% of that. And the campaign is for, we'll have to maintain stocks also, because we can't be out of the market once we change back to ethyl vanillin. So I think in terms of demand, And what we were saying between, you know, around that 4,000 ton mark, I think is very doable. Our bigger challenge is, of course, the longer working capital cycles and logistics and cash flow. So that's what we need to address because we have a large order book even in all our businesses, actually. And executing that with tight cash flow positions is a bigger challenge than the market itself.

Okay. And if you can also just add up on to the kind of your outlook about vanilla for the European market, what inventory situation now? Do you see some easing situation in Europe at least?

Yeah, the market situation is much better. In the methyl vanillin also, out of the 300, 150 is coming from Europe. And methyl vanillin, we have no stocks to give to the European market till we start our campaign again. So, the market is coming back. So, I mean, what we had said, that 1,500, 1,600 tons for the year, I think we're good for that.

Okay, okay. Just last one point from my side. About the WinPi and the Vita4 ramp up, so we have been trying to build up the field force for scaling up those operations, which was almost like stalled before acquisition. So what is the field force addition practically now we have created during FI26? And whatever the exit rate revenue that we have seen for both these two businesses, so what is the kind of scale-up that we should see in the blend operation?

So in the blend operation, we closed the year at 1,050, including discontinue. This year, we are looking at anything northward 1,400 crores for the FI condition. So, as far as adding Salesforce, it is across the world. So, it's not only for WinPi, in WinPi or Vita 4, we've also added workforce, because the markets are in different places, right? So, the salespeople are being added across the world, and that addition we have done, which will support Vita 4 and WinPi growth. We expect WinPi and Vita 4 to be, you know, about break-even EBITDA in FI-187, for sure. And the overall lens business to be northwards of 1,400 euros.

Sure. Just one point, sir, this tariff refund that you have mentioned from the U.S., so whether that would be really tangible or it would be adjusted to subsequent two trades?

So historically it has been 50-50, but the US government and the people there on the concentrates are saying that... We may get the cash up front. But historically, if you see similar situation, they have given 50% of cash and 50% has been adjusted against duty. But the kind of turnover we have from India, Vanlin itself, that 9 crores, 10 crores, we can swallow it in 3-4 months. So we are not worried about that. If they give cash, we are more than happy. If they give duty, we are happy.

Hmm. Okay. Sure. Yeah. Thank you, sir. Wish you all the best. Thank you.

Thank you very much. Ladies and gentlemen, due to time constraint, we will take that as the last question for today. I now hand the conference back to the management for the closing comments. Thank you, and over to you, sir.

Thank you. Thank you for your precious time, ladies and gentlemen, and we look forward to interacting with you in the next quarter. Thank you.

Thank you, members of the management. On behalf of Kamblin Fine Sciences Ltd., we conclude this conference. Thank you all for joining with us today, and you may now disconnect with us. Thank you.