S H Kelkar and Company Ltd — Q1 FY27 earnings call
Summary generated by AI from the official transcript S H Kelkar and Company Ltd filed with BSE on 04 Aug 2026. Every statement cites a verbatim quote from that document — open any citation to read it. This is a record of what management said, not a recommendation. How we check these summaries
The short read
S H Kelkar reported consolidated revenue growth of 14% year-on-year to Rs. 662 crore in Q1 FY27, with EBITDA rising 21% to Rs. 89 crore and margin improving to 13.4% from 12.6%. Management attributed the growth to strong Flavours segment performance and healthy Fragrance segment growth led by Europe, while the Global Ingredients business saw softer demand. The company also recognized approximately Rs. 30 crore of exceptional income from an insurance claim related to a fire incident, with net debt rising to Rs. 852 crore due to inventory buildup and capacity expansion.
Numbers mentioned
Revenue: Rs. 662 crore (Q1 FY27)
p. 3
“The consolidated revenue from operations grew 14% Y-o-Y to Rs. 662 crore.”
Jagdish Agarwal, page 3 of the filed PDF · View the filing
EBITDA: Rs. 89 crore (Q1 FY27)
p. 3
“Consolidated EBITDA rose 21% to Rs. 89 crore with EBITDA margin improving to 13.4% from 12.6% in the corresponding quarter last year, aided by operating leverage on the higher revenue base.”
Jagdish Agarwal, page 3 of the filed PDF · View the filing
Net debt: Rs. 852 crore (as of June 2026)
p. 4
“On the balance sheet, net debt increased by Rs. 65 crore during the quarter to Rs. 852 crore as of June 2026.”
Jagdish Agarwal, page 4 of the filed PDF · View the filing
Exceptional income from insurance claim: approximately Rs. 30 crore (Q1 FY27)
p. 4
“During the quarter, we recognized exceptional income of approximately Rs. 30 crore towards the insurance claim relating to the fire incident.”
Jagdish Agarwal, page 4 of the filed PDF · View the filing
Flavours revenue: Rs. 112 crore (Q1 FY27)
p. 5
“I think we did Rs. 112 crore revenue for Flavours this quarter and ballpark Rs. 95 crore would be on a normal basis.”
Kedar Vaze, page 5 of the filed PDF · View the filing
Foreign exchange contribution to growth: 5% (Q1 FY27)
p. 5
“I think 9% is the like-for-like growth and net-net 5% is our additional FX sales due to exchange rate.”
Kedar Vaze, page 5 of the filed PDF · View the filing
Effective tax rate: 31.5% to 32% (Q1 FY27)
p. 6
“So even today, when we look at June quarter, we are around 31.5% to 32% kind of”
Jagdish Agarwal, page 6 of the filed PDF · View the filing
Europe capex in Q1: Rs. 25 crore (Q1 FY27)
p. 9
“About Rs. 25 crore was done in Europe in the quarter 1.”
Kedar Vaze, page 9 of the filed PDF · View the filing
Depreciation expense run rate: Rs. 35 crore per quarter (current)
p. 10
“Right now, we are at around Rs. 35 crore per quarter.”
Jagdish Agarwal, page 10 of the filed PDF · View the filing
Revenue from products launched in last 3-5 years: 10% to 11%
p. 8
“About 10% to 11%.”
Kedar Vaze, page 8 of the filed PDF · View the filing
What management said it would do
A record of statements made on the call, in the words management used. Parakho does not forecast, endorse or assess them, and their presence here is not a view on whether they will happen.
Revenue growth and margin — double-digit revenue growth and improved margins · FY27
stated firmly by Jagdish Agarwal
p. 4
“Notwithstanding these quarterly variations, the current business momentum keeps us on track to deliver double-digit revenue growth and improved margins for the full year.”
Jagdish Agarwal, page 4 of the filed PDF · View the filing
Insurance claim settlement — full settlement · current financial year
stated firmly by Jagdish Agarwal
p. 4
“The claim process is progressing well, and we expect full settlement within the current financial year.”
Jagdish Agarwal, page 4 of the filed PDF · View the filing
Vanvate factory commissioning — commissioning of Vanvate plant · third quarter
stated firmly by Jagdish Agarwal
p. 6
“Okay. Abhijit, when we talk about the factory, we are looking at commissioning Vanvate in the third quarter.”
Jagdish Agarwal, page 6 of the filed PDF · View the filing
Net debt level — broadly at June level · September
stated conditionally by Jagdish Agarwal
p. 6
“Our debt position is expected to remain broadly at the June level, although it may slightly go up in September.”
Jagdish Agarwal, page 6 of the filed PDF · View the filing
Effective tax rate — less than 30%
stated as an aspiration by Jagdish Agarwal
p. 7
“Our target is that should be less than 30%.”
Jagdish Agarwal, page 7 of the filed PDF · View the filing
Group ROCE — in excess of 15%, long-term target of 20% · 3 to 5 years
stated as an aspiration by Kedar Vaze
p. 10
“So, I think we should have excess of 15% ROCE as our target. Our long-term target is 20%.”
Kedar Vaze, page 10 of the filed PDF · View the filing
European business ROCE — 17% to 18% · longer term
stated as an aspiration by Kedar Vaze
p. 9
“So, on the longer term, we see ROCE of around 17% to 18% in the European business.”
Kedar Vaze, page 9 of the filed PDF · View the filing
Debt reduction — approximately Rs. 25 crore quarter-on-quarter · from third quarter onward
stated conditionally by Kedar Vaze
p. 12
“And our expectation is that every quarter, we will continue to reduce by approximately Rs. 25 crore quarter-on-quarter thereafter.”
Kedar Vaze, page 12 of the filed PDF · View the filing
Flavours quarterly run rate — higher than Rs. 95 crore, Rs. 96 crore · Q2 and beyond
stated conditionally by Kedar Vaze
p. 14
“So base is Rs. 95 crore, Rs. 96 crore, quarter 2 will be better than Rs. 95 crore, Rs. 96 crore and quarter 3 will be better than that and so on and so forth.”
Kedar Vaze, page 14 of the filed PDF · View the filing
U.S. revenue — 1.5 million to 2 million minimum · for the year
stated conditionally by Kedar Vaze
p. 14
“We expect to do about 1.5 million to 2 million minimum revenue for the year in the U.S.”
Kedar Vaze, page 14 of the filed PDF · View the filing
Remaining India capex — around Rs. 50 crore · this year or next year
stated conditionally by Kedar Vaze
p. 9
“And then we have an opportunity based on how things are running and demand scenario to either put out the last Rs. 25 crore of capex in the quarter 4 or defer it to quarter 1 next year for the Vashivali plant upgradation.”
Kedar Vaze, page 9 of the filed PDF · View the filing
Depreciation run rate post Vanvate capitalization — Rs. 38 crore, Rs. 39 crore per quarter
stated conditionally by Jagdish Agarwal
p. 10
“And once we do Vanvate capitalizations we will move into that, we are expecting somewhere Rs. 38 crore, Rs. 39 crore per quarter kind of a run rate.”
Jagdish Agarwal, page 10 of the filed PDF · View the filing
Q&A highlights
Management's answers to analyst questions, in Parakho's words rather than a transcript. Each row names who answered and carries the verbatim quote it was drawn from.
Management said Flavours revenue would normalize to around Rs. 95-96 crore per quarter after a strong Q1, and that India Fragrances softness reflected a conscious decision to exit low-margin business and a high prior-year base.
Answered by Kedar Vaze
Asked by Abhijit Akella: What is the outlook for Flavours segment revenue growth for the full year, and how much of Fragrances India softness is due to a high base?
p. 5
“So, as we increased prices, we have rationalized the margins. We have made sure that we are selling the right products to the right people at the right pricing in a much more disciplined manner”
Kedar Vaze, page 5 of the filed PDF · View the filing
Management said the quarter was not unusual and margins should be similar going forward if double-digit growth is sustained, though percentages could vary by about 1%.
Answered by Kedar Vaze
Asked by Abhijit Akella: What margin range should be expected for the full year given Q1's 13% margin?
p. 6
“But at the moment, we see strong double-digit growth across the board. And if that double-digit growth is sustained and remains there, we should be in similar margin EBITDA level at least in terms of absolute numbers.”
Kedar Vaze, page 6 of the filed PDF · View the filing
Management said pricing and costs are fixed for the next 6 months due to inventory and contracts in place, reducing exposure to raw material shocks.
Answered by Kedar Vaze
Asked by Jatin Chawla: Are gross margins benefiting from strategic inventory buildup, and could there be negative impact once inventory depletes?
p. 8
“So, we have increased the inventory to ensure that for the next 4 to 5 months, I mean, 6 months from July, effectively, we do not have any additional cost pressure on the raw material.”
Kedar Vaze, page 8 of the filed PDF · View the filing
Management agreed margins should improve with double-digit growth but said they could not confidently predict beyond 2-3 months given uncertainty.
Answered by Kedar Vaze
Asked by Jatin Chawla: Should EBITDA margins improve as revenue scales given CDC investments are largely complete?
p. 9
“We are just not in a sort of position to anticipate or predict the demand structure or demand situation for the full year.”
Kedar Vaze, page 9 of the filed PDF · View the filing
Management said each of the three new market investments (Germany, U.S.A., U.K.) is expected to reach EBITDA breakeven within three years as a key milestone.
Answered by Kedar Vaze
Asked by Sajal Kapoor: What would indicate that the long-term investments in operating system improvements have been successful?
p. 11
“And what we are looking at is each of these investments to breakeven on a year-on-year basis in the year 3. This is our milestone.”
Kedar Vaze, page 11 of the filed PDF · View the filing
Management identified major global macro disruptions as the main constraint, noting such events affect both the current year and the subsequent product pipeline.
Answered by Kedar Vaze
Asked by Sajal Kapoor: What single constraint, if removed, could double earnings over the next 5 years?
p. 11
“I think main sort of concern for us is major disruptions on the global macro.”
Kedar Vaze, page 11 of the filed PDF · View the filing
Management said the business had muted growth due to supply chain disruptions but expects recovery in the second half of the year.
Answered by Kedar Vaze
Asked by Bharat Gupta: What is the turnaround outlook for the Global Ingredients business?
p. 13
“So, we are not in a strong position to push the Global Ingredient growth. But it is a stable business, and we continue to see a recovery in the second half of the year.”
Kedar Vaze, page 13 of the filed PDF · View the filing
Management estimated Rs. 50-60 crore of the claim is still pending and will continue to be pursued.
Answered by Kedar Vaze
Asked by Bharat Gupta: How much of the insurance claim remains to be processed for the rest of the year?
p. 13
“I think Rs. 50 crore to Rs. 55 crore, Rs. 60 crore is the claim amount pending.”
Kedar Vaze, page 13 of the filed PDF · View the filing
Management said price corrections were passed on to nearly all clients, with supply withheld from clients unwilling to accept the new pricing.
Answered by Kedar Vaze
Asked by Amit Kumar: Have further pricing actions been taken given raw material disruption, and how much has been accepted by customers?
p. 12
“I think almost 95% plus of the clients, we were able to get reasonable price corrections.”
Kedar Vaze, page 12 of the filed PDF · View the filing
Risks flagged
Geopolitical developments affecting energy, freight and trade volatility
p. 3
“Geopolitical developments in West Asia have kept energy, freight and generally trade volatility remains high.”
Kedar Vaze, page 3 of the filed PDF · View the filing
Softer demand in Global Ingredients business due to export market weakness
p. 4
“The Global Ingredients business saw a softer quarter on lower demand in select export markets, and we are watching this closely.”
Jagdish Agarwal, page 4 of the filed PDF · View the filing
Higher operating expenses from R&D and CDC investments weighing on Fragrance segment margins
p. 4
“These are deliberate growth-oriented investments and while they will weigh on segment margins until the corresponding revenue scale up, they are central to the quality and durability of our future growth.”
Jagdish Agarwal, page 4 of the filed PDF · View the filing
Global macro disruptions affecting business momentum and product pipeline
p. 11
“The moment we have a macro like we had the pandemic or something like this, then it is affecting not only the year in which the pandemic happens, but also the pipeline for product launches in the subsequent couple of years.”
Kedar Vaze, page 11 of the filed PDF · View the filing
Raw material and pricing volatility affecting supply and margins
p. 13
“We have muted growth for the first quarter. We will resume the growth, and we have taken steps, as we mentioned a few years ago on backward integration and complete away from China supply chain.”
Kedar Vaze, page 13 of the filed PDF · View the filing
Generated by claude-sonnet-5. Source: the transcript as filed with BSE. We link to the exchange's copy; we do not host transcripts. Parakho is a data and screening tool, not an investment adviser — nothing here is a recommendation to buy, sell or hold.