S H Kelkar & Company Ltd (NSE/BSE: SHK) – Brief Review

1. Business overview

- Among the largest Indian-origin fragrance & flavour companies (Keva brand), supplying to FMCG, personal care, home care and food & beverage players in India and overseas. (bsmedia.business-standard.com)

- Operations across fragrances, flavours and aroma ingredients; has overseas arms such as Keva Europe B.V., Keva Fragrance Industries Pte, and others. (nsearchives.nseindia.com)

2. Recent financial performance

- FY25 (year ended 31 Mar 2025):

- Consolidated revenue from operations ~₹2,123 crore (+15% YoY).

- EBITDA ~₹297 crore; however, net loss of ~₹13.6 crore, mainly due to exceptional loss from fire-related damage and impairment of assets. (nsearchives.nseindia.com)

- FY26:

- Back to profit – latest compiled annual numbers show net profit ~₹33 crore after the FY25 loss, indicating a turnaround but still not very high profitability. (goodreturns.in)

- Q1 FY27 (quarter ended 30 Jun 2026):

- Revenue from operations ~₹662 crore, up ~14% YoY and ~2% QoQ – highest quarterly revenue so far. (icicidirect.com)

- Reported net profit ~₹45 crore, up ~78% YoY and sharply higher vs ~₹2 crore in Q4 FY26. (livemint.com)

- A ₹29.95 crore insurance claim is booked as exceptional income; adjusted for this, underlying operating profit is much lower and margins remain under pressure (raw material and other costs). (alphainflection.com)

3. Balance sheet and debt

- The company has moderate borrowings; an FY26-27 disclosure to BSE shows outstanding borrowing around ₹223 crore and clarifies that SHK is not classified as a “large corporate” under SEBI’s framework. (tapetide.com)

- Cash profit generation has improved post-fire, but part of recent profitability is aided by insurance and one-offs rather than purely by core margins. (nsearchives.nseindia.com)

4. Positives / strengths (illustrative points)

- Established, niche business in fragrances and flavours with long-standing relationships with FMCG/consumer companies; relatively high entry barriers due to formulations, customer approvals and regulatory aspects. (bsmedia.business-standard.com)

- Revenue has shown consistent double‑digit growth over FY25–Q1 FY27, indicating demand resilience across end‑segments. (nsearchives.nseindia.com)

- Insurance recovery and resumed capacities post‑fire have stabilised operations versus the disruption seen in FY25. (bsmedia.business-standard.com)

5. Key concerns / risks

- Margin pressure: Multiple quarters of operating margin compression; Q1 FY27 reported PAT looks strong but is significantly supported by exceptional insurance income. Underlying operating profitability is weaker than headline numbers suggest. (alphainflection.com)

- Raw material volatility: Key inputs are petrochemical and natural aroma chemicals; margins are sensitive to input price swings and ability to pass on costs to customers. (alphainflection.com)

- Execution after fire & capex abroad: The company has invested further in overseas subsidiaries (e.g., Keva Europe), and had large fire/impairment related adjustments; utilisation and return on these assets need monitoring. (bsmedia.business-standard.com)

- Debt and working capital: While not very highly leveraged, borrowings and working‑capital intensity mean cash flows must remain healthy to avoid strain, particularly if margins stay under pressure. (tapetide.com)

6. Valuation and stock view (general, not a recommendation)

- Business Standard recently quoted the stock at around ₹145 (NSE/BSE) as of 10 September 2026; this is purely historical, not a live price. (business-standard.com)

- For your own assessment, you should compare:

- Current P/E and EV/EBITDA vs its own 5‑year history and vs peers in speciality chemicals/flavours.

- Trend in operating margin and ROCE over the next few quarters excluding one‑off insurance income.

- Progress on debt reduction and working‑capital days.

You can access the latest investor presentations and result updates via BSE/NSE corporate announcements or aggregators like Trendlyne (search for “S H Kelkar investor presentation”). (trendlyne.com)

This is a factual company/stock review based on publicly available information up to Q1 FY27. It is not investment advice or a buy/sell/hold recommendation. Please use it only as a starting point and evaluate as per your own risk profile or with a SEBI-registered advisor.

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