Thank you. We will now begin with the question-and-answer sessionThe first question comes from the line of Varun Shivram with Choice Securities. Please go ahead.

Hello. Am I audible?

Yes. Please go ahead.

Thank you for the opportunity. So, my first question is like generally in Q1, like we have recorded a growth despite the seasonally weak quarter. So, could you like let me know which are the like current where we are seeing demand in core business and the geographies where do we see the growth?

Sure. Thank you. So, the demand remains as strong and back to normal levels. Although Q1, as you rightly mentioned, historically has been a softer quarter always. And that's primarily because the larger mint vertical also starts around May and June. We effectively are seeing a situation where the demand from the Western Hemisphere, which is largely U.S. and Latin America, is ramping up. And effectively, we are going to be having that deal flow along with the new seasonality of the products that we're coming up, those numbers reflecting in Q2 and Q3 for those exports.

Okay. Sure. And can you guide me on like the current environment of the core business and how do you see it evolving going further?

So, again, the business is split into multiple different verticals. So, I can kind of walk you through the major verticals of Krystal Ingredients largely that we are having, such as we are having the cooling agents, the Citral vertical, which is largely driven by Safranal, and the phenol derivatives. So, starting with cooling agents, the customer audits completed and initial orders are secured with meaningful revenue contribution which is expected towards Q3 FY ‘27. And this is a product that is largely used in oral care and in the confectionery and the specialty flavor segment. So, there is a stability testing period and so customers when they approve the product, they effectively go through a longer, they start with smaller batches

first, they see the stability at their side, and then they effectively come back to us with larger orders. So, that's for cooling agents. For the Citral and the Safranal based derivatives, at this stage, the production and the revenue contribution will start in a meaningful way by Q2 FY ‘27 and far more meaningful orders will come through by Q3 FY ‘27. Again, the product has been successfully approved by multiple customers and we are hoping of a strong traction in the Citral vertical as well. As far as the phenol derivatives segment is concerned, the trial productions are expected to start by end of Q2 FY ‘27 followed by the approvals and the quality process. Commercial production will start from a standpoint of generating revenues in the export market by Q3 FY ‘27 and with more meaningful revenue contribution coming through by Q4 FY ‘27.

Okay. Thank you. Understood. So, coming to the Krystal Ingredients and the Dahej facility, like could you update us on the progress made during the quarter and across the new product categories and the key milestones that we have achieved so far?

Hi. So, actually, you know, the products that were just mentioned, you know, the cooling agents, Safranal, phenol, they were our Krystal products itself. So, you know, the update that Yash just gave was on these, these products are Krystal products itself and the updates on them itself were given. Do you want to talk about the clove?

Sure. And regarding the core, the Gem portfolio, which is largely driven by clove and mint. So, in the clove segment specifically, we had a situation where in the first quarter, which is around March and April, there was a major cyclone resulting into flood-like situation in the cultivation areas in Madagascar. As a result of which, the incoming raw material shipments were significantly delayed because even their port in Toamasina was shut down, I believe for a period of close to 30 days. And therefore, there was a complete slowdown of the incoming RM on that one perspective. But I believe from May onwards, that has come on stream and though there are shipping challenges across the board, we are seeing incoming material now. And as far as the mint segment is concerned, as mentioned

earlier, we are having the harvest season in the months of May through July largely and we had that harvest for mint and now we are seeing the order flow coming in largely from on the export front and those shipments are going through.

Okay. That was quite helpful. So, just wanted to understand like what are the key operational milestones that remain before like this business moves into more consistent volume phase?

Sure. So, the key operational milestones is largely by the customer approvals in place that we effectively need to get, right? So, these customers are large multinational companies that are operating in the oral care, the confectionery space, the FMCG space, and then, A it's a long, we have to get our products approved there. B they start with smaller trial orders first just to make sure that we are completely set in their system, the stability is very well checked out, and then effectively they go in for the larger orders. So, we are seeing those meaningful contributions to start off with Q3 and Q4 from these large companies. And for cooling agents, for example, we've already been approved by the world's two largest companies who are consuming that product.

Okay. Thank you. Thank you so much.

The next question comes from the line of Rushabh Dugad with Finnovate Financials. Please go ahead.

Hello?

Yes. Please go ahead.

Am I audible, sir?

Yes, you are.

Yes. Thank you for the opportunity. So, I have a couple of questions around the new verticals and the margin trajectory. So, on phenol derivatives, trial production is expected towards the end of Q2 FY ‘27 followed by the required

approval and the quality processes. Could you take us through the remaining milestones and the current timeline towards the commercial production?

Is this specifically for the phenol segment?

Yes. For the phenol segment.

Yes. So, for the phenol segment effectively, we are having the trial productions start off with at the end of Q2 and then by Q3 and Q4 is when -- by pretty much Q4 is when you start meaningful revenue that coming in. We have had our pilot batches as well as those batches approved. The customers largely want to see the actual plant level trials where we are at a fairly advanced stages. So, the playbook is reasonably simple. While we are targeting the end customers who are really the large MNCs, who would be directly using this ingredient in their products, there is again a sizable market which is available through traders and distributors in different geographies who are pretty much are going to be faster to go ahead and approve the product and start consuming it in their networks. So, that is how we are trying to build up our order book for phenol.

Okay. So, the given the qualification cycle involved in this category, should we expect the revenue contribution to build progressively once the production begins with more meaningful contribution come in towards Q4 or like FY ‘28?

That’s correct. That's absolutely correct.

Okay. So, in a looking at a newer vertical together, once they move through their respective approval and the qualification process, how should investors think about the overall pace of a revenue ramp-up across this business?

So, FY ‘27, you know, is, you know, more like a ramp-up year where, you know, one by one we'll be starting off each vertical. Now, as all of the verticals, of course, will commence this year, however, through FY ‘28, you know, as the year starts, they will meaningfully ramp up and, you know, we'll see a significant bit of revenue coming through the next financial year. Right now, of course, we have commercialized, we have gotten initial orders, but a

meaningful ramp-up will, of course, happen in the next financial, at the start of the next financial year.

Okay. Understood. So, it would be fair to expect that a contribution to build progressively through FY ‘27 with a more meaningful benefit in this expanding platform emerge through the FY ‘28?

Yes. Of course. So, as the quarters go by, the revenue from each of the verticals that have commenced will gradually increase and, of course, as a meaningful contribution, yes, through ‘28 you will see a large chunk of the volumes coming through.

Okay. So, coming to the margin part, so gross margin and the EBITDA margins were under pressure during this quarter with the product mix, higher raw material cost, and the operating cost base of the new facility being a key factor. As the business progresses, what do you see as the key driver for a margin recovery?

So, the production ramp-up is a key driver and as we go more and more into value-added products across those value chains, plus we have a multipurpose plant that has been established as well as a strong and robust pipeline of products developed, which are specialty in nature and focused upon aroma chemicals largely that are ready to be executed and we have effectively already started working on a number of those product approvals with multiple customers. So, net-net, this will certainly have a major impact as we go more and more into value-added products and ramp up the production.

Okay. Understood. I have one more follow-up question regarding this. So, like in a medium term, how do you see the balance between the product mix and the operating leverage contributing to the improvement in margin?

So, the contribution, so you're looking for a bifurcation in terms of revenue, right?

Right.

Right. So, see for FY ‘27, we don't want to guide for that, but of course through 28,Krystal products will be more than 50% of the overall revenue.

I'm sorry, could you just repeat your question?

Any ballpark number for FY ‘27 in a margin?

See, the -- we don't want to comment on that as of yet. We'll just -- you know, as the year goes by, we'll be in a better place to, you know, guide on both the revenue and the margins for FY ‘27.

Okay. Understood, sir. Thank you. Thank you so much for opportunity and very all the best for the next quarter.

Thank you. Thank you so much.

The next question comes from the line of Dhruv Shah with JJ Holdings. Please go ahead.

Thanks for the opportunity, sir. So, I wanted to understand about the profitability trajectory. So, the consolidated business reported a loss during the quarter while the depreciation has also increased following the capitalization of Dahej. So, how should the investors think about the path towards sustainable consolidated profitability from here?

Yeah. So, I think the answer lies in the commercialization of the new products as discussed. You know, currently we're facing a timing mismatch, you know, where the cost of the new facility, the depreciation, interest, manpower cost, they are all, you know, kicked in to the current financials due to the standby capacity which has already kicked in. But however, the revenue from the higher margin product mix which is yet to come from our Krystal unit has not come in yet in our current financials. So, as you see the revenue of those products coming in, you will see an increase in terms of the profitability. So, it's just a commencement -- it's just a function of the commencement and ramp-up of our new products.

Okay. So, how would that -- on the cash flow side, how would Krystal -- how are we expecting the working capital and cash generation profile of the business to evolve?

Yeah. So, see the working capital cycle, you know, Krystal being more towards, you know, synthetic products where we don't need to hold inventory

a large inventory for a large number of days, the working capital cycle will definitely be lower than the traditional Gem business. So, in addition to that, we are also availing the factoring services which will reduce our debtor days. So, the working capital cycle for Krystal should be much lower than, the Gem business currently.

Okay. Got it. And sir, I have one last question. So, finally, given the current state of the capacity ramp-up, how should investors think about the company's growth trajectory towards FY ‘27 and FY ‘28?

So, again, as we mentioned, FY ‘27 we don't want to guide, it's purely a ramp- up year where we are completely focused on commercializing each of the verticals and we'll give a better guidance, we want to be more accurate with our guidance, so as the year passes, we'll give a more stronger guidance towards the end of the calendar year for the next year as well.

Okay. So, can you just tell highlight like what can be the two or three key milestones for the next few quarters that would give you greater confidence towards the FY ‘28 trajectory?

So, as Yash mentioned The customer approvals, we're going towards that, our products are ramping up and we have received our initial approvals from several customers and as we keep getting these approvals and selling our products, so you should just focus on that, the key milestones about our customer, our products being approved via various customers.

Okay. Got it. Thank you.

Participants, in the interest of time and fairness to others, please restrict yourselves to two questions. For any more questions, you may rejoin the queue. The next question comes from the line of Rupesh Tatiya with Long Equity Partners. Please go ahead.

Hi, sir. Thank you for the opportunity. Hi, Yash. Hi, Aadit. So, first question is, I think the easiest ramp-up we were looking at was Eugenol and Eugenol derivatives where I think we were expecting significant growth this year. With this Madagascar flooding issue and supply chain issues, do you see that that ramp-up now, is delayed materially?

So, it did have some impact right at the beginning of the year. However, we have been able to overcome that luckily, the ports have opened up and the material is flowing through and we certainly see a fairly strong ramp-up and demand side from the export market, as a result of which by the year-end, we should be fairly close to our expected numbers in terms of what we have planned for.

Okay. And just a follow-up on that Eugenol is what -- any sense on the uprooting of the trees, Yash, because my understanding is once the trees are uprooted, it takes maybe 10 years for the trees to come back. And with that context, do you see, you know, structurally tighter margin and then hence, you know, higher realization, higher margin in Eugenol and Eugenol derivatives?

So, luckily, we are fairly diversified also in our sourcing from East Africa with Madagascar and different regions of Madagascar also producing this crop. So, once a clove tree is out, it doesn't take up to 10 years, but may take a little bit shorter time depending on the weather conditions about 2 years to 3 years because we are effectively getting it out from the leaves, right? So, it's a couple years until the leaves come up and then effectively you can start get extracting the oil from the leaves and the stems. Now, coming back to your original question, we see that the production has not been impacted to that. Luckily, the trees are still there, they are giving, plus it's also there in different regions of Madagascar that we can effectively source it from. So, from a standpoint of long-term availability of the crude material, we don't foresee a major structural challenge. The ports not being open for about a month actually created a major backlog and compounded its impact. And I believe that has been resolved now. Now, I hope that answers your question.

Yeah. That is good to hear. The second question is on cooling agents. So, I think I heard that you got an approval from second customer also, so congratulations on that also. So, when does the second customer commercial supplies to second customer start and then with these two customers can we expect, let's say 25% kind of capacity utilization on 500-ton capacity this year?

We should be fairly close to those numbers and we believe by Q3 and Q4 we should be expecting those revenues to come in because these are export products and right now, shipping challenges has been well documented across

variety of platforms are our major concern especially to the Western Hemisphere. But we believe a large part of that numbers should start showing up by Q3 and Q4.

Any -- I mean, sorry, any...

Sorry to interrupt, Rupesh, I would request you to rejoin the queue. Thank you. The next question comes from the line of Sahil Goyal with Equinox Capital Venture. Please go ahead.

Yeah. Am I audible?

Yes. Please go ahead. Yes, sir.

Sir, my question is on you said, the meaningful revenue from Gemcool 3, 5, and 23 will come by Q3 FY ‘27 and you have secured some orders, so can you quantify the order?

So, we're not disclosing the order values as of -- so we're not disclosing the order values, but as the -- you know, as the quarter passes, we'll give you clarity. We're not disclosing any order values or customer names as of now.

Okay, sir. And so, my second question is there are upcoming products and new products which got approval, then these are the margin -- these products have the higher margin than previous existing products?

Yeah. Absolutely. So, the -- as we develop new products, so how we're looking at it is, each new product that's coming in, we want it to be like more margin accretive than our existing products. So -- yeah.

There are some products under approval phase, so how many products are those which are in under approval?

So, we actually have a large pipeline. I think, Yash, can talk about it.

Sure. So, the whole idea is to keep continue, it's a multipurpose plant, there are value-added products that we have made in terms of our entire capacity and they are -- we've started producing those products, they are in different stages of approvals. So, by Q3 and Q4, you'd start seeing this kind of value-added specialty revenue coming in.

Okay, sir. Thank you.

Thank you.

The next question comes from the line of Omkar Dandekar with 3A Capital Service. Please go ahead.

Hello, sir. Am I audible? Hello?

Yes, you're audible. Please go ahead.

Yes. Thank you for the opportunity. My question is on restocking side. Management was positive on restocking side due to tariff relief in Q4 FY ‘26 and there were expectations that Q1 FY ‘27 will reflect that growth. Your views on that and can you share your insights if you are in talks with your end customers?

Could you please repeat the question? We were -- it was not very clear to us.

Okay. Management was very positive on restocking side due to tariff relief in Q4 FY ‘26 and there were expectations that Q1 FY ‘27 will reflect that goal -- growth. So, but the growth was, was average. Your views on that and can you share your insights if you are in talks with your end customers?

So, in Q1, we were expected to as the months of May and June are largely the harvest season for mint, plus compounded with the delays in Madagascar for the clove shipments that we've already discussed, it created a ripple effect and that was further compounded by the shipping challenges out of India. So, we have seen the exports that have actually happened in the months of May and June, but effectively we could not account for them because they have not reached their final destination. So, we will see that rollover happening effectively once they reach their final destinations, as some of them already have in July and August and some will, and we will see that come through. Now, in terms of the customers, yes, we see the demand coming back for the core products as well as the newer products largely in our export market.

Okay. And on the currency side, as our currency has depreciated much, do we see any competitive advantage compared to other countries in pricing which can boost our export sales?

So, at this stage, there are a variety of products that we engage with. Some are from a standpoint of pure play Indian origin such as mint, but some are effectively import complete processing in India like clove and then exporting again. The same goes with phenol segment and the other segments such as Citral and the cooling agents as well. So, in a way, it is not really a tactical advantage nor is it a disadvantage for us because we import, we hedge our foreign contracts in terms of what the export realization is and then we subsequently export it out.

Thank you. Ladies and gentlemen, due to time constraints, we will take that as the last question for today. I would now like to hand the conference over to the management for the closing remarks.

Thank you for -- thank you everyone for your questions and for the engaging discussion. To summarize, we remain focused on navigating the near-term operating challenges while progressing the commercialization of our newer product verticals. We are entering an important phase of progressive scale-up with emphasis on improving utilization, strengthening our product portfolio, and deepening customer relationships across our markets. We remain committed to disciplined execution, sustainable growth, and long- term value creation for our stakeholders. Thank you once again for joining us today. We appreciate your continued trust and support and we look forward to updating you on our progress in the coming quarters. Have a good evening.

Thank you, sir. Ladies and gentlemen, on behalf of Gem Aromatics Limited, that concludes this conference call. Thank you for joining us and you may now disconnect your lines.