By Ks Badri Narayanan

Copyright thehindubusinessline

Target: ₹474

Camlin Fine Sciences (CFSL) is positioned for strong growth, with its vanillin volume expected to rebound in H2-FY26F as tariff uncertainties ease and the festive demand in Western markets picks up. Global vanillin demand is around 33ktpa against a capacity of about 41ktpa, with methyl vanillin contributing the largest share (25–26ktpa).

However, the capacity is concentrated in China, and recent anti-dumping duties (Add) in Europe, coupled with near-zero US imports from China, have created a demand-supply mismatch.

This shift opens opportunities for Indian suppliers, and CFSL is projected to sell around 2,700t of vanillin in FY26F. Beyond vanillin, the company’s blends business continues to expand at a high-teens growth rate, driven by its diversified presence across food & beverage antioxidants, biofuels, animal nutrition, pet food & rendering, and nutrition & health segments.

The global antioxidant and blends market, valued at over $18–20 billion, has high entry barriers due to regulatory, technical, and supply chain challenges. CFSL benefits from backward integration, strong customer relationships, and technical know-how, enabling it to deliver superior Returns on Capital Employed (RoCE), estimated at 55 per cent in FY27F.

We value CFSL at 15x one-year forward EV/EBITDA, arriving at a higher target price of ₹474 (₹425 earlier). Downside risks: Decline in vanillin prices.

Published on September 22, 2025