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Oriental Aromatics Ltd. – A fresh investment opportunity.

Updated: May 3

Oriental Aromatics Limited (OAL) , A complex business with high barriers to entry; a proxy to the FMCG Industry.


1st April, 2021. Current Market Price Rs.588 a share.


Oriental Aromatics Limited

Dear Investors,


Have you ever wondered how products such as perfumes, shampoos, detergents, creams, chocolates, pharmaceuticals etc. smell or taste exactly the same no matter where or how many ever times you buy them ?


The answer lies in the billions of dollars FMCG companies spend on developing flavours and fragrances in order to ensure that the consumer gets the exact same sensory experience every time he or she uses their product. This goes a long way in establishing the product /brand in a consumer’s mind, which ultimately defines the success or failure of a FMCG product.


The global flavours and fragrances industry was estimated to be worth US$ 21 bn in 2018 and it is expected to reach US$ 35 bn by 2028. More specifically the aroma chemicals market is estimated to reach US$ 6.5 bn by 2023.

Oriental Aromatics Limited happens to be a pioneer in this domain. It was founded in 1955 by Mr.Keshavlal Bodani and today is one of the largest manufacturer and exporter of a variety of terpene chemicals, camphor, and other speciality aroma chemicals in India.


The company currently has manufacturing plants in Bareilly, Vadodra and Ambernath, and two state of the art R&D and innovation labs in Mumbai and Vadodra. The company exports to several locations across the globe including Europe, America, Africa & Asia. Exports contribute to roughly 30% of the company’s top line.


The Company’s vast product range includes Terpineols, Pine Oils, Astromusk, perfumery chemicals, Synthetic Camphor etc. These products find wide applications in the FMCG, paint, tyre, cosmetics and food & beverage industries.

Oriental Aromatics Limited

For the past several years the company has been carrying out several noteworthy initiatives to drive long term growth and create a road map for the future. Some of these developments are as follows,

2013 - The company enhanced its product portfolio by setting up an Astromusk plant in Vadodara.

2014 - A manufacturing and R&D facility was established in Ambernath, Maharashtra with a capacity of 6000 MT to manufacture Flavours and Fragrances.

2015 - The company made two acquisitions Arofine Chemical Industries and Vaishnavi Chemicals Private Limited to enhance its aroma chemicals portfolio.

2017 - The company acquired a majority stake of 57.66% in Camphor and Allied products limited to form one single listed entity ‘Oriental Aromatics Limited’.

2018 - The company commissioned another speciality chemicals plant in vadodra, Gujrat with a capacity of 6700 MTPA.

Presently the company has further planned to invest INR 350 – 400 crores over the next 3 – 5 years to further consolidate its position in the flavours and fragrances market.

OAL Stock Research

The initiatives above have resulted in a robust growth in profits and reserves. Oriental Aromatics has grown its top line at a 16% CAGR and its bottom line at an even more impressive 31% CAGR over the last five years. All this while managing to bring down its debt to equity ratio from 0.7 to 0.1, making the company almost debt free.

Oriental Aromatics Ltd Financials

Once a fragrance or flavour is integrated into a product and rolled out by the FMCG company, the income earned in manufacturing the same is highly predictable and stable. This is because FMCG companies seldom switch flavour or fragrance providers to ensure homogeneity in their products. This makes the customers of OAL highly sticky. In addition to this, the technological know how and the capital expenditure required to develop carefully engineered aromas and flavours is fairly high. This makes Oriental Aromatics Limited a business with a strong moat and high entry barriers.

We hope to see continued outperformance by Oriental Aromatics on the bourses over the long run and wish the management steadfast growth in the years ahead.



SEBI Disclosure: This report is not a recommendation to buy or sell any stocks. Investors are requested to conduct independent research or consult their Registered Investment Advisors for advice. Prosperity Wealth Management will not accept any liability for any investment decisions made based on this report. Further, Prosperity Wealth Management may hold or sell these stocks at its discretion without notice to investors. The company’s opinions may be biased by its holding in these stocks. Prosperity Wealth Management does not guarantee the accuracy of any information provided herein. Copyright 2021.


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