S H Kelkar & Company Ltd. share price target

We maintain our positive outlook the company, led by sustained growth trajectory and improving profitability in the Fragrance and Flavors business. We have raised our FY21E/FY22E earnings estimate, supported by a strong demand recovery and improving raw material pricing environment. Reiterate Buy with a revised TP of INR152/share. Outlook remains strong despite transient volatility in RM prices...

SH Kelkar & Co Ltd (SHK) posted revenues of INR1,925mn with 29.8% YoY decline, which was 24.6% below our estimate of INR2,555mn. Revenue growth was mainly impacted by ~28%/47% decline in the Fragrance and flavour segment respectively due to demand and production side disruption led by COVID 19 in both domestic as well as in the overseas market. However, as per management demand has started picking up with strong traction from end-May'20. EBITDA margin declined by 82bps was 136bps higher than our estimate mainly driven by softer raw material prices (Gross Margin was up 73bps YoY to 43.9%) and cost optimisation measures. Absolute EBITDA came 17.6% below our estimate due to weak revenue. PAT came in line with our estimate at INR149mn (est: profit of INR152mn) supported by higher Other income (196% YoY) and lower tax rate (21.7% vs 33.7% in...

below our estimate of INR2985mn. Revenue growth was mainly led by 14.4% growth in fragrance segment on account of steady uptick in domestic market and increased client engagements. Overall domestic business grew by 20.7% (YoY) and Exports shown flat growth of 1.2% (YoY). EBITDA...

11 February 2020 SH Kelkars (SHKL) 3QFY20 operating performance was driven by improved demand in the Fragrances business (~90% of revenue). We expect growth momentum to be driven by demand pick-up in the underlying industry. Albeit the delay in CFF consolidation, we cut our earnings estimates for FY20 and increase estimates for FY21 on account of better demand outlook and easing RM pricing pressure. Reiterate Revenue grew 13% YoY (v/s est. EBIDTA increased 8% YoY to INR431m (v/s est. INR492m) with margin contracting 75bp YoY to 14.9% (v/s est. Adj. PAT was up 20% YoY at INR256m (v/s est. However, SHKL reported net loss of INR109m (v/s INR214m profit in 3QFY19) owing to one-time exceptional expense of INR365m on impairment of PPE and other cost related to the shutdown of a research facility in the Netherlands. Fragrances biz grew 14% YoY to INR2,595m, largely driven by growth in the domestic segment (+22% YoY), while the overseas segment remained muted at 1%.

our estimate of INR2921mn. Revenue de-growth was mainly due to subdued sentiments in the FMCG segment. Overall domestic business decline by 8.3% (YoY) and Exports shown growth of11.5% (YoY). Despite a subdued environment, the Company is witnessing an improved traction in terms of...

27 August 2019 Revenue grew 15.6% YoY to INR2,744m (v/s est. INR2,611m), due to new product launches in the domestic FMCG market and healthy demand in international markets. EBIDTA stood at INR464m (v/s est. EBITDA margins expanded 260bp YoY (+770bp QoQ) to 16.9% (v/s est. 14.2%), largely driven by lower other expenses (down 330bp YoY) on adoption of IND-AS 116, which led to lower rental costs. PAT stood at INR185m (v/s est. Fragrances business grew 15% YoY (+1% QoQ) to INR2,435m, driven by strong traction in both domestic (up 10% YoY) and international business (up 26% YoY). Flavors business grew 14% YoY (+6% QoQ) to INR280m on increased client engagements and uptick in international business. Further, normalizing RM supply environment is likely to ease cost pressure. (a) Company has re-iterated strong double-digit growth for FY20 to be largely driven by both domestic and international business.

SH Kelkar & Co Ltd (SHK) posted revenues of INR2,744mn with 16.1% YoY increase which was above our estimate of INR2,589mn. Revenue growth was mainly driven by new product and brand launch and value & volume growth in existing products. Overall domestic business grew by 9.8% (YoY) and Exports shown growth of 25.4%(YoY). Despite 97bps decline in gross margin due to change in product mix, EBITDA margin improved by 297bps, was 234bps higher than our estimate. Surge in margin due to adoption of Ind AS 116for lease this led to lower rent exp by INR39mn. Adj EBITDA margin were up by 154bps. Adj. PAT came below our estimate at INR185mn (est INR235mn) due to higher finance and depreciation cost (Ind As adjustment). As per management, over the last...

Poor offtake impacts performance: Revenue declined 5.4% YoY (our estimate: +4%) to INR2,697m in 4QFY19, which management attributed to a slowdown in demand, mainly in the domestic market. A structural shift toward larger/mid-sized players was evident in the domestic fragrance industry, along with lower demand from smaller customer categories. In line with this trend, SHKL gained a higher wallet share in the mid and larger customer categories, while sales from smaller accounts were significantly impacted. EBIDTA declined 8% YoY to INR249m (our estimate: INR466m),...

1. Established over 90 years back in 1922, SHK is one the largest India fragrance and flavor companies. 2. SHK possess state of the art manufacturing facilities for both domestic and global markets. The company manufactures and markets over 9700 products to over 4100 customers. 3. SHK's fragrance products and ingredients are used by FMCG companies in personal care, fabric...

S H Kelkar & Company Ltd. (SHK) reported consolidated Q3FY19 sales at INR 256 cr down 9% YoY as the fragrance business de-growth of 11% yoy while the flavours division registered a growth of 2% YoY.

S H Kelkar & Company Ltd. (SHK) reported consolidated Q2FY19 sales at INR 285 cr up 28% YoY

Unprecedented price surge in key raw materials and supply side disruption continued to impact topline and profitability of the company.

26 May 2018 INR2,851m in 4QFY18, YoY growth of 15% (est.14%). INR569m), decline of 27% YoY with EBITDA margin contraction of 544 bps to 9.5% YoY (est.18.5%) (includes one-time expense of INR50m). Adj. PAT stood at INR231m (est. INR357m), decline of 35% YoY with margin contraction of 300 bps to 8.1% YoY (est.11.6%). On a full year basis, revenues stood at INR10,430m, down 1.6% YoY(est.

S H Kelkar & Company Ltd. (SHK) reported consolidated Q4FY18 sales at INR 285 cr up 15% YoY as the fragrance business registered growth of 23% yoy strong uptick in demand from FMCG sector

Fire in BASF's German chemical plant, China resorting to factory shutdowns in a move to regulate environmental laws, and floods in the US have caused several supply-side disruptions for f lavors and fragrances (F&F) players like S H Kelkar (SHKL), with sourcing of raw materials like or ange oil, citral and Isoprenol being severely affected. BASF alone accounts for 20-25% of SHKL's RM requirements. While SHKL maintains a large stock of inventory, severe supply constraints could exert pressure on margins over the next 2-3 quarters. We, however, believe that margin compression will be partly offset by the shifting of production from the Netherlands facility to Vapi (likely to be completed by July/August 2018). We revise down our FY19 margin estimate by700bp to 18.4% at the operating level and by 800bp to 11.4% at the PAT level.

S H Kelkar & Company Ltd. (SHK) reported consolidated Q3FY18 sales at INR 283 cr up 22% YoY primarily led by the fragrance business. Strong demand uptick from FMCG sector coupled with...

SHKL's revenue increased 13.5% YoY to INR2,831m (est. of INR2,551m) in 3QFY18(22% YoY growth post netting off GST from the base quarter). Fragrance business reported growth of 16.5% YoY to INR2,546m, while Flavors business reported de-growth of 8.4% YoY to INR272m. EBITDA rose 46% YoY to INR576m (est. of INR459m post excise adjustment), with the margin expanding by 440bp YoY to 20.3% (est. of 18% post excise adjustment). Gross margin contracted sharply by 600bp YoY to 46.1%, while other expenses declined 180bp YoY to 14.1% of sales. Fragrance PBIT margin came in at 15.5% (v/s 13.6% in 3QFY17), while Flavors PBIT margin stood at 25.5% (v/s 30.8% in 3QFY17). Consequently, adj. PAT grew 33% to INR338m (est. of INR286m post excise adjustment) from INR254m in the year-ago period.

Q2 FY18 Update - S H Kelkar Revenue declined 9% yoy to Rs 475cr in the first half of FY18. The fragrance business reported de-growth of 13% YoY to Rs 413cr, while the flavor business revenue remained flat yoy.