Camlin Fine Sciences Limited ($532834)

Ladies and gentlemen, good day, and welcome to the Camden Fine Sciences Limited Q4 and FY '26 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 involve risks and uncertainties that are difficult to predict. Please note that this conference call is being recorded. I now hand the conference to Mr. Ashish Dandekar, Chairman and Managing Director, Camben Biosciences Limited. Thank you, and over to you, sir.

Thank you. Ladies and gentlemen, welcome to the quarter's 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 2 years, 3 years, and you'll see the progress in the numbers and in the explanations. So without anything more, I'll hand over to Santosh Parakh for his brief.

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 that there has been some impact on our business in this quarter. This quarter, the sale was impacted by around 20% due to delay in 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 paucity 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 INR 424 crores of revenue in this year. The total revenue is INR 1,723 crores. You 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. Hence the 9 months 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 7 crores to INR 8 crores of revenue, it had to be shown as discontinued business. And the total revenue of INR 1,723 is also lower by around INR 54 crores. I'll 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, 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 the states or making blends rather than competing it with the local Indian competitors. We have been trying to blend the states into blends business. And hence, some of the straight sales business has moved to the blends business. In blends, we have shown -- that has been the hallmark of our revenue in the last few years, and we have maintained a 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 wind which did INR 10 crores in the first month was only able to do around INR 17 crores in the last 3 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 M. Going forward also, blend business is looking good. I will tell you about it after some time. The vanillin aroma portion, we had told you last time that we have changed to the ethyl vanillin campaign, and we stopped the production of methyl vanillin and we had -- we were not modification, but changing over our methyl plant into ethyl vanillin plant, which took a 2 months when we started ethylanine plant. So largely methyl van, there was very small portion of methyl vanillin produced in the quarter 4, 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 tariff going down, we had delayed some of the inventories and hold those inventories to reduce the tariff impact. So internal channel stock, the entire sale of vanillin, which is being happening in Q4 is largely through the internal channel stock, which will be liquidated. We also have some internal channel stock still remaining of methyl vanillin, which will help us in the coming quarters. Of course, ethyl vanillin, we have orders on hand for the quarter 1 of around 300 metric tons. The plant is running well. We'll be taking a campaign of around 600 metric tons of methyl vanillin. So we have enough methyl vanillin to -- not enough, but a fairly good stock of methyl vanillin to not allow the market to try. Of course, then the tariff withdrawn, there would be higher realizations. We have started looking at the green shoots on that. Our -- we did -- the channel was sold in the last month and our average realization for the company for the vanillin has gone up from sub-11 to more than $12.5 in quarter 4, and we are quite confident it will grow obviously above because of no tariff there, only 15% tariff is there in U.S. and Europe. This higher realization will also benefit us in the next quarter. You would have seen that we also had launched the claim after the withdrawal of tariff by the Supreme Court order, we did -- we have paid around INR 9 crores 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 of subsidy 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'll be investing in human capital to help us grow the business, especially in the blend sector, and we are really looking at exponential growth in blends business. Hence, last 2 years, if you see, we have been investing into employee cost, and that's the main -- one of the main reason in increase in employee cost. Of course, Vinpai also came for 4 months. This entire quarter results also incurred revenues and expenses of Windpa.or the whole quarter, last quarter, it was only 1 month. That has also pushed the cost. Overall costs also are under control, but for the freight cost, which has increased in the last 6 months and some of the other costs, but Vindpa also has contributed to increase in that cost. resultantly the quarter EBITDA has been INR 21 crores, it's 5%. We -- I think it's -- in the given circumstances, it's not a bad performance. Obviously, going forward, the currency fluctuations will impact the business. But for us, the dollar sales in dollars, it should positively impact and 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 there will be -- we can recover the cost. This year -- this quarter, we also liquidation of CFS happened. We received the order liquidator order. And the accounting entries has been done. There is a gain booked on loss of the company, which is around INR 100-odd crores, which we have booked this quarter. One good thing about this is the cash burn on this discontinued operations of around INR 50 crores, INR 60 crores every year is going to come to 0 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 INR 7 crores to INR 8 crores next year. Just quickly on the outlook for the next year or the subsequent quarters, vanillin business, as I said, will improve its realization. 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 are already have the position to now push the blends for higher growth. In the first month itself, we have crossed more than INR 100 crores of global blends business. And that run rate station, 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 Dahej 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 cover. In fact, we had reduced the -- or planning to close down the plant or shut down the plant of diphenol, especially with the price. As you know, our basic raw material prices of INR 85 is now being quoted at more than INR 150 per kg and the availability is also not consistent. So at present, we are getting it, but we are not sure if the conflict linger how it will look like. So we had taken a conscious decision that we should reduce the cash burn because of the high pricing and lower realization in. We had already secured hydrofinance from China, which is at a very reasonable rate and can -- we would save by purchase rather than manufacture, which helps us to keep our downstream of sales running. Catechol, we already have enough stock because the plants were running at 60%, 70% last year, and it was not matching the consumption was not enough for the vanillin and hence, we have enough stocks in the system of catechol, which can sustain 8 to 9 months of our vanillin production. So having said that, things look good. We will be looking at how to use or repurpose this diphenol plant, we have to also look at how the prices move, what will be the raw material prices of dhenol, how the competition is looking at it, how the Chinese are responding to the whole situation and also the conflict. And soon, we'll take some decision and decide on the parts of the diphenol plant. Having said this, I think I'll open this forum for questions.

[Operator Instructions] We will take the first question from the line of Raman K from Sequent Investments.

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

Yes. So diphenol is the product which we manufacture. Diphenol is nothing but hydrogen and category. I was talking about the raw material phenol, which was generally INR 85 to last -- just before the -- now it has gone up to INR 150. So naturally, the cost of production of our product, hydrogen and category have drastically increased.

Okay. Understood. And category are manufacturing internally and hydrocone we are supplying it from China, right? .

We manufacture hydrogen and catechol together as dial -- we stopped at icono plant. Both of the prod products cannot be manufactured. I was saying that hydrokinan, we used to use entirely for our states production valuating it that hydrogen will be importing. As far as category is concerned because Ramin plant has not achieved enough capacity utilization last year, we are carrying enough category, which can help us to produce running for next 8 to 9 months. And that category will not be importing, we'll be importing hydroplane for our downstream, and that hydropinan, we have already secured from Chinese manufacturers for next quarter. .

Okay. I understood, sir. So basically, we don't have any impact of any direct impact of this sudden rise of final prices, if my understanding is that right? .

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

Okay, sir. And sir, 1 -- from the PPT, again from the -- obviously, from the report result and the PBT, I can see that we have INR 85 crores gain from discontinued operation. Can you just elaborate what is this?

So as you know, I just mentioned that we have the CFO subsidiary, which was liquidated and there were certain loans in that subsidiary. It has been booked as a gain on derecognition of CFS0. And that's what has come. This is it's around INR 95 crores of loan, but the credit to credit is lower because there are some discontinued business and the losses which have been adequately explained in the notes. So that -- this discontinued business, the credit is largely on account of the loans, which are de-recognized state from the financial statement for the -- on liquidation of CFC .

Okay. Understood. And sir, with respect to Vanillin, you have mentioned that the internal channel stock of filing has been liquidated at the end of -- so now can we expect our redirection to move upwards given that the inventory has been liquidated at the same time, the U.S. tariff has reduced from 50% to 25%.

So as I started this segment, we had taken a campaign of Italy in year 2 and is metal any type. -- till now we were producing methyl Vanillin. We had a good order book of Ital vane. And hence, we wanted to produce Etalon -- for that purpose, we had to take a break of metal ending. We stopped the production of Mitali 15th of January. So there was hardly any production here, but we have sale of value. And that field of mining is from the internal channel store in the material which we have sold to U.S. to our subsidiary, was carrying the stock. So that channel stock has been sold in this quarter, and that's why you will see the revenue. And still, we are carrying internal channel stocks, which will be sold in the subsequent quarter. And we'll also be selling ethyl Vanillin, 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 Vanillin, which we are producing now. And we'll be selling some channel stocks, internal talent stock. So how do prices -- you had that last the last part. Yes, the tariffs have gone down. Methyl Vanillin, we are impacted. The basic prices in U.S. are not moved, they're $18, $17.5, $18 in this. Because the duty was at cost, we had to sale from India at $11 to $12. Duty reduced our realized -- in fact, as I said, our realization moved from sub $11 in the last quarter to almost $12.5 plus 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 realization difference from methyl Vanillin, when we compare with methyl Vanillin, I just want to understand the rational band switching from Mittal van into Ital vane.

Generally, methyl and ethyl, the customers like to have Ita is a more stronger note product -- so its consumption is lesser than metal rain, but the customers ask for Ital value. So and they're happy if the supplier is able to sell both the Vanillin. Now having said that, the talent price different generally is $1 to $1.50 more than Metall. But our cost is also almost $1 more. So either a ethyl or methyl, my realization, the margins for dollar for KG remain the same. .

We will take the next question from the line of Rishikesh Shah from Alkane Capital. .

Sir, I wanted to know what would be Vanillin sales this quarter?

In quantities or...

In quantity.

And quantity. In quantity Vanillin, we sold around 320 tonnes .

Sir, if I remember -- yes, if I remember correctly, in Q3, you had mentioned that we had 200 tons of panel which we had held back -- so I thought this quarter, we might see a better volume sales -- so what will be the reason for only 20 that we had to hold off our production, but still we had INR 650 crores in 650 tonnes in a channel with subsidiaries and everywhere. So I think things would have been better, right? .

So I'll just put the same numbers which you said. We talked last integrally. By that, we had done 100 tonnes. We said that we'll be doing 200 more tonnes by holding back the stock and trying to take the benefit of realization at. And as I said, I'm still carrying around 300 tonnes of bans stock in the channel to sell in quarter 1. And that's how 600 tonnes works out.

Okay. So -- okay. Got it. Sir, my second question was if we look at profitability, how much of an impact would you say this Middle East crisis had on our EBITDA. See, because if I remove the INR 10 crores or INR 12 crores of tariff EBIT that we have got, then our EBITDA would have been around INR 10 crores. So there's only 2%, 2.5% EBITDA margin in FY '27, we have guided to double digit. So what do you think would be -- would there be any change to our guidance revenue-wise and margin-wise?

Extent, the Middle East crisis has impacted our sales by about INR 50 crores or so. as well as, as Santosh mentioned earlier in his opening remarks, that the Winpa acquisition, there was an EBITDA loss, a loss at EBITDA level because due to some liquidity issues, which Vinta had, which, of course, we are addressing. So if you combine these 2, our EBITDA should have been higher by about INR 30 crores. And we're not changing our guidance -- and we are not changing our guidance for FY '27. We're guiding on the same line.

And sir, this right now, seeing now let's say, our tariffs are down to 18%, and we are able to satiate $18. -- ethyl would be at $20 or something. So what would be a blended realization we can take for FY '27. .

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

And I have no question on the blend side. Sir, then beta, what would be the EBITDA breakeven we can expect, at what revenue run rate .

Yes. So Gafisa $16 million for the whole year. And so is wind tie also at the same level, $14 million to $16 million.

We will take the next question from the line of Anish Tiwari from Vergara.

Can you explain or help us understand your debt levels at March 26 and how 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 your business again in 2 .

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

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

Capital infusion is the last so. 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 better door open, and you have seen that we have increased our authorized capital to some extent in the month of March. But at this moment, we are the equity infusion is really a last resort, not on the table at all.

And is that you in that this is a simple play in bandwidth or this is more structured a bit of high yield debt between equity and that .

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

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 accessed the distraction going to access my risk. .

But we'll try to keep it as minimal as possible as the market rates. .

Got it. Second question I had in the industry cycle. You were talking about inventories in the channel reducing in U.S. and then maybe getting your volumes that in the U.S. How is that situation? When do you think you can get your volumes strongly going in the U.S. .

This is for the Vanillin business? .

Yes, Vanillin business. Yes. .

Yes. The waning business this year, as we've said in the past, our estimate for FY '27 in the U.S. will be around the 2,000 to 2,400 metric tons. And we are on stream to achieve that number. That's what mislanded together. So we have several businesses already contracted and some being contracted. So I think that 2,200 to 2,400 it 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, when in Q4 we adjust 300 plus tons. .

Yes. So Q1 also will show some pickup in the U.S. But the total combined between our U.S. and Europe Q1 will show some growth over Q4 of last year of FY '27.

Got it. And then it will keep picking up to meet your guidance? .

Yes, correct.

We will take the next question from the line of Rehan from Coherent Belt.

A couple of questions across the business. What is the tonnage or cater inventory we are sitting on in terms of for now? .

So about in the region of about 3,000 tonnes. .

So that in terms of Danilenyield is how much approximately between metal and Ital because I know the yield would be different because of Catacel, sorry? .

Yes. So it talks about 1:1, roughly for the calculation, you can take 1 is 1 for both for methylene .

Okay. And considering our guidance for FY '27 has been about 70% utilization. So that would be about 4,000 to 4,200 tonnes of Vanillin, where would the balance 1,000 come from? .

So we buy from China. .

So you'll buy category from China? .

Yes. It Capella. .

Okay. And then you will blend it here and do the needful.

Yes, then we'll do it in the current step whatever the date manufacturing is done. .

And is the tariffs currently, as for my understanding, it's 10%, not 18%, right, because of the...

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

So your current realization would be about $16-odd in U.S. at the moment? .

No, no, because the DDP pricing today, in the U.S. market, our competitor Santos selling at about $17 to $18 -- so there is in cost. There's 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 are seeing prices signed at $19, $19.5.

Correct. Yes. So -- but Thanos 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 quarter, they 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 for tariffs will be about closer to $14.

Yes, $13.5%, $14 in that range. .

Okay. And is there -- because it's been almost a year since the ADD can -- are we now seeing that now is the channel clear because prices should have been north of $20 by now excluding -- since then, I mean, I'm wondering how -- with this inflationary scenario...

What'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 that because they've kind of -- the capacity utilization would be at 100% by then. So they actually they have in 3 prices yes.

And the costs currently that the company is incurring because of employees, is this -- we had discussed earlier in the February con call as well. This is the peak right now we will let the business stabilize a bit because -- you've done 2 acquisitions. You have a new facility coming on stream, which is an -- 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're moving from -- like from manufacturing to importing and then doing your value addition year with Vanillin scaling up and blendedness nature is already asset light? Are you on track to deliver about INR 300 crores, INR 330 crores of EBITDA for FY '27 because Vanillin alone at your current realizations of $13.5 should give you INR 200 crores of EBITDA. .

Yes. So the way we are seeing it is that on the top line, we should be in the region of between 20 to 40 and EBITDA margin would be between 12% to 14% on an overall basis. So that's. Of course, we do have a plant which we are trying to look at what to do with making the 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 22,00 to 24,00.

So going forward, we don't have any European losses. The Chinese losses, I think, are about INR crores to -- INR 8 crores odd annually, right, which is about INR 2 crores, INR 15 crores, INR 2 crores a quarter. And considering you have about INR 300-odd crores -- 300 tonnes of stock in Randon 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.

Geopolitical, yes. So Q1 is difficult to say that whether we -- because we did have manufacturing of diphenol till 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. So...

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

No, no, no. We don't have any inventory because it's just in time because it's next door of the economic plan. So we have -- we don't keep any stock. We just keep it just-in-time supply from there. .

So are we -- in Q1, are we going to maintain this 48% gross margin? Or are we going to slip down -- because I mean if you're going to do 4,000 tons of .

WE maintain that margin. It could be 1% up or down, but we should be able to maintain that margin.

Because the 1,700 tonnes of Vanillin alone, even -- I mean, sorry, not 700,000 tonnes of Vanillin if I take it as a quarterly phenomenon, I know it's not that way, but if you have to even average it out for the -- 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, $9.50, all in inclusive, you're at INR 360 at 1,000 tonnes, that's automatically INR 36 crores, INR 37 crores of EBITDA. So I mean I'm just not understanding the numbers, if you can help me understand the same. .

No. So Again, the raw material costs have gone up, right? The $9 is no longer $9 because final cost and all other raw material costs have gone up in the current situation that we are seeing. So that 9%, 9.5% assumption is -- was prior to the war after that, of course, with all these costs in fee your realization has not gone up, but your cost has gone up for banking. So when I look at Vanillin, I would say you bake in about...

No. But this cater is old inventory, as Santos also mentioned, that 3,000 tonnes has not come now, what is being .

All is only 4 of the raw materials and the rather normalcies well. So for example, glycolic cost take, Caustic is actually equal in value as categology, and that has gone up by literally doubled up in the last -- after the war situation.

The total tool cost is still a with around $2 of category. So you can just imagine there are a lot of other margin, 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 tonnes, what will be up for KG cost of Vanlin? .

So my raw material cost, even if we hold on to the category are seeing that 20% to 25% increase in cost. So if I knock out $2 to $1, $2 from my total cost of 7.5% and that's how Boss was saying $9. .

So today, is it $10 or $9.5.

Sorry, to interrupt....

It's on the same, madam. No, what is the current cost per kg of VanLent these levels .

Yes. So that's what I'm saying. So the raw material and the raw material cost, which was $7.5 has gone up by at least $1.2 -- so it's almost $9 is the RMC, but your conversion cost 2,000 tonnes, if you were to look at your conversion cost, it would be at $1.50. So you're at $10.5 of base cost. And your realization is 13%, 13.5%. So you're talking about $3 spread on an 800-tonne in the first quarter, you're looking at INR 22 crores, INR 23 crores coming from they're not 35, 36, what you're baking in. .

Sorry to interrupt in between Rehan to rejoin the queue again for more questions as we participate waiting in the queue. We will take the next question from the line of Surya Patra from PhillipCapital.

Sir, my first question on the which is the base business, VSBA and all those kind of things. So the kind of price pressure, competition also in the recent in general rise in chemical prices because of the worst situation, what we have seen. So given those background, what is the kind of outlook that you would be having on that? The states with specialty ingredients as well as the states business? .

So in the States business, some of the cost increases, we will be able to pass on and we are passing on TB prices have corrected and have gone up to reflect that. pricing is slightly better than it was a reward. So in terms of passing on the increase of costs, with the lag, we are in track to be able to pass it on. So I don't see a problem there. As far as volume is concerned, I think we are gaining a lot of market share also in the blends business, where our TV and BHA consumption -- internal consumption is growing, which also is giving us some economies of scale in terms of production of TBHQ and BH.

So whether the outlook for 2017, it would be positive? Or how should 1 really think -- for .

Is positive. Yes. For THB is positive. The outlook .

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

Yes, we don't have much porperformance chemicals. We don't have much now. And now with Catell, I mean, after stopping the diphenol production, the Performance Chemicals will be a very small part. They're not selling -- we were making hydrocone and selling some erosion also in the market. So slowly, all of that will go. So we're not -- really the focus is not on that.

Okay. Okay. My second question is on the supply chain issue practically that you would be seeing currently. So there was obviously a difficult situation, whether the host is behind now and Q1 onwards, should we see a kind of improve the supply situation for us -- or there would be still there would be some challenges relating to some particular input, if you can direct 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 it will take maybe a few months ago. .

So then the overhang remains because even if the situation is, I don't think the logistic price will immediately come down. In fact, tomorrow morning, I think, 1 of our guys, we trans logistics guys co. And I know -- I mean he wants to increase the price. The cost, the -- if you compare prewar and now, in fact, prewar also the costs are increasing of red. The cost, as far as we are concerned, when we put almost a lot of material across the globe in the American continent, both north and south of it. Costs are almost 3x. Yes, you can always say why it's not had, 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 all for some time, at least it will take a quarter to come back to the normal situation. .

So then H1 of FY '27 is a continued impacted period for the business generally theoretically, that is what one should deliberate, sir? .

So how this pans out on a cost basis, I feel that the cost of freight may remain. Even if the waiver and the crude remains then there's no reside, right? So it's very unpredictable. The question is if the crude is under, how much I can run pass it on to my customer, right? How much I may have bear from that? So it's a very difficult calculation to say. I feel that even a stable growth of 10% to 15% over these 2 quarters is great. .

Really great. Okay. Sir, about vanilla business, we have talked about it -- so since the tariff U.S. tariff was not there or almost near normal kind of tariff situation that has been there in some time. And -- so -- and this is the kind of year-end situation. And normally, the order book buildup or time also. So any order book buildup that you have seen for FY '27 and hence, that confidence that, okay, there a certain quantum of the supply that is definitely possible in respect of the pricing or the cost equation. And also -- yes, sir...

Yes. So to answer that, we started with the tile on campaign. And the campaign is for 600 tonnes, 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 the tailwind. So I think in terms of demand, what we were saying between around that 4,000 tonne mark, I think, is very, 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 all our businesses, actually, and executing that with tight cash flow position 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, sir. What the entry situation now? Do you see some easing situation in Europe at least Europe.

Yes, the market situation is much better. In the ethyl Vanillin also out of the 300, 150 is coming from Europe. And methyl Vanillin, we have no stock to give to the European market until we start acne again. So the market is coming back. So I mean, what we had said that 1,500, 1,600 tonnes for the year, I think we're good for that. .

Okay. Okay. Just last 1 pick from my side. About the Vina and the write-up for ramp-up. So we have been trying to build up the sales force for scaling up those operations, which was almost like stalled before acquisition. So what is the sales force addition practically now we have created for -- during FY '26? And -- and whatever the exit rate revenues that we have seen for these 2 businesses. So how -- what is the kind of scale up that we should see in the brands operations? .

So in the blends operation, we closed the year at INR 1,009 crores.

150, including the...

1,050 or including this can. This year, we are looking at anything now INR 1,400 crore for the FY '27 in the blends business. So as far as adding sales force it is across the world. So it's not only for wind in Windpark, 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 Biafra Mini growth. We expect WinpaandVita4 to be above breakeven EBITDA in FY '27 for sure. and the oral blends business to be northward of INR 1,400 crores. .

Sure. Just 1 point, sir, this tariff refund that you have maintained from the U.S. So whether that would be really tangible or it would be adjusted subsequent to trade? .

That's what we and it normally becomes 50%.

So by historically -- but the U.S. government and the people there on the consumers are saying that we may get the cash has been. But historically, if you see a similar situation, we have given 50% of cash and 50% has been just this duty. But the kind of the turnover we have in from India, Vanlintself that INR 9 crores, INR 10 crores we have follow it in a couple of -- 3, 4 months. So we are not worried about that. If the due cash, we are more than happy -- if the new duty, still we are happy.

Thank you very much. Ladies and gentlemen, due to time constrait, we will take that as a last question for today. I now hand the conference back to the management for the closing comes. 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 Camlin Life Sciences Limited, we conclude this conference. Thank you all for joining with us today, and you may now disconnect your lines. Thank you.