Introduction : GEM is a speciality chemical manufacturer for over 20 years with majority of its business coming from Mint and Mint Derivatives (70%) and Clove and Clover derivatives (18%) . Products used in industries like oral care, pharmaceutical , nutraceuticals and

Products : GEM offers 70 products across 4 categories namely i) mint and mint derivatives (ii) clove and clove derivatives (iii) phenol (iv) other synthetic and natural ingredients. Prominent clients include Colgate, Patanjali, Dabur and SH Kelkar

IPO Issue : Company had an OFS for 276 cr while 175 was fresh issue of which 140 cr will be used to repay debt. Total issue size was 450 cr . OFS is mainly from 1 shareholder i.e. dōTERRA Enterprises, Sàrl , avg purchase price 38 rs, which is a Luxembourg based company in the

Promoter : Company is prompted by Vipul Parekh and Family. There is no pre-IPO or dilution done by the company except that DoTerra holds 25% in the company which seems to be strategic alliance with them . Avg purchase price of Rs 38 by DoTerra which is doing OFS

Legal Case in Supreme Court : 1 major litigation is filed with Supreme Court by the Revenue Department of UP against Kanha Vanaspati which has sold the factory land, on which GEM has the Badaun factory , as 1 time settlement between itself and SBI to clear due of Rs. 328

Tax Cases and Contingent Liabilities and Wilful Defaulter : There are 18 tax proceeding against the company amount to 40 cr . GEM also has contingent liabilities amounting to 58 cr in total . In another case relative of promoter Kaksha Vipul Parekh have been categorised as

Product Dominance : GEM has 28% share of Indian Clove Market , 65% share in Eugenol and 58% share in Eucalyptus.

Product Wise Revenue : Major contribution from Mint and Mint derivates followed by Clove and Clove Derivatives .

Installed Capacity : Expansion in capacity can be seen majorly in Mint products .

Export vs Import : Significant exposure to USA as a percentage of exports but company says that it wont have a impact as they are level 2 player in the fragrance and flavour markets .

Raw Material : Majority of the raw material is sourced from UP and Haryana. Nearly 36% of the raw material is imported. Business is seasonal in nature due to availability of raw material . 👇👇

Research and Development : R&D expenditure is less than 0.5% of sales having 13 scientist in R&D but company has been quite vocal about the R&D they are trying to do .

Exclusive Supply Agreement with DoTerra : This is interesting . Apparently DoTerra is the one doing OFS but has a binding agreement til 2028 with GEM . DoTerra Contributed 7% of the topline in 2025

Expansion and Capex : Unit 3 major expansion at Dahej has been completed and capacity to has gone live in August 25 end. This is reflected in the CWIP in 2025 statement . This unit will mainly cater to Olive and Derivate products. Capacity at Aug end will be 17500 MT from

Dahej Facility and Subsidiary Krystal : Company is expanding to new product using Citral as a base at the new facility in subsidiary Krsytal in Dahej. 👇

Financials : For FY24 GEM has done a topline of 452 cr with an EBITA margin of 17% and PAT margin of 11% (PAT at 50 cr ) while for FY25 it has clocked 503 cr with EBITA margin of 17% and PAT margin of 10.56% (PAT at 53 cr). #financials

Receivables and Cash Flow : Average inventory days for last 3 years have been 160 days which is on a very high side. Trades receivables for FY25 were 27% of revenues but company has zero bad debts in books

Peers : See the gross margin comparison among peers .

Way Forward : If the company is able to mitigate the export tariffs disadvantages and risk associated and given the new facility , having some new product, is online and kicking by Aug 25 , can GEM be a GEM ? Disclosure : All notes are for educational purposes and this is

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