ORIENTAL AROMATICS LIMITED

Recommendation history

• 2022-05-04HoldHold: FY22 revenue rose 23% to ₹869 crore, but EBITDA fell 40% to ₹92.5 crore and margin dropped to 10.65% from the prior 15%-17% aspiration; Q4 EBITDA margin recovered sequentially to 10.89% but remained down 33.6% year over year. Management expects only 10%-12% FY23 growth while ₹180-190 crore of FY23 capex and further raw-material volatility create execution and cash-flow risk, leaving the recovery case unproven.
• 2022-01-31HoldHold: Q3 revenue rose 7.9% YoY to ₹206 crore, but EBITDA fell 70% to ₹16.2 crore and margin collapsed to 7.87%; nine-month revenue grew 36.5% while EBITDA declined 42%. The recovery case rests on price pass-through, stabilizing input costs, and new capacity, but management’s 15–17% EBITDA-margin ambition remains conditional and execution-heavy.
• 2021-12-08HoldHold: Q2 FY22 revenue was ₹230.5 crore, up 25.4% YoY but flat QoQ, while EBITDA fell 59.6% YoY to ₹19.8 crore and margin collapsed to 8.59%; PAT declined 63.6% to ₹12.1 crore. The recovery case rests on passing through raw-material inflation, stronger fragrance-and-flavor inquiries, and roughly ₹350–400 crore of planned capex, but management offered no quantified timing for margin normalization and analysts correctly flagged execution and environmental-clearance risks.
• 2021-07-29HoldHold: Q1 FY22 was strong on reported growth—revenue rose 103% YoY to ₹229.7 crore, EBITDA increased 88% to ₹34.5 crore, and PAT rose 129% to ₹22.7 crore—but EBITDA margin was only 15.02% as high-cost raw-material inventory was consumed. Management reaffirmed sustainable EBITDA margins of 15%–17%, implying limited margin upside from here; the thesis depends more on capacity-led revenue growth and successful execution of the expansion program than on further operating leverage.
• 2021-05-11HoldHold: FY21 was strong, with revenue of Rs 709 crore down 7% but operating EBITDA up 22% to Rs 155 crore and PAT up 18% to Rs 102 crore; however, Q4 showed the normalization risk clearly—revenue rose 31% to Rs 221 crore while EBITDA fell 7% to Rs 33 crore and margin dropped to 15.04% from 20.98%. The bull case is recovery in fragrances and flavors plus capacity expansion, but the call did not provide enough quantified evidence on incremental margins, ROCE, cash generation, or execution to justify a buy.
• 2021-01-21HoldHold: Q3 was a record, with revenue of Rs. 191 crore (+9% YoY), EBITDA of Rs. 53 crore (+93%) and a 27.95% margin, but management explicitly said these margins are unsustainable and retained a 15%-17% long-term EBITDA margin framework. Demand and capacity expansion support 12%-15% medium-term growth, yet rising raw-material and freight costs, unresolved realization math, and Baroda CAPEX escalation to Rs. 160-180 crore make the risk/reward insufficient for a fresh buy.
• 2020-08-07HoldHold: Q1 FY21 revenue fell 47% YoY to Rs. 113 crore and EBITDA fell roughly 48%-49% to Rs. 18 crore, despite a resilient 16.2% EBITDA margin and debt-to-equity improving to 0.03x. The recovery case is credible at 90% plant utilization, but management’s FY21 target of 75% of FY20 revenue remains difficult to reconcile with the implied post-lockdown run rate, and analyst pushback exposed limited visibility.