S H KELKAR AND COMPANY LIMITED Overview
S H Kelkar and Company is India's largest Indian-origin fragrance and flavour (F&F) house and the country's largest domestic fragrance producer, with more than a century of heritage. It designs and manufactures fragrance compounds, flavour systems and aroma ingredients that consumer-goods companies embed in soaps, detergents, personal care, fine fragrance, household products, foods and beverages. Its competitive niche is serving India's large base of small and mid-sized FMCG companies alongside multinational clients, a segment the global "big four" (Givaudan, dsm-firmenich, IFF, Symrise) serve less intensively. Since 2016 it has assembled a European platform (PFW in the Netherlands, CFF and Nova in Italy, Holland Aromatics) and is now building creative development centres in the US, UK, Germany and the Middle East. FY2026 revenue was INR 2,368 crore, but profitability has been compressed by a 2024 plant fire, global expansion costs and rising leverage. The investment case rests on margin recovery and deleveraging.
What the company does
S H Kelkar develops and supplies fragrance and flavour ingredients that are used as raw materials by other manufacturers. Its fragrance portfolio covers personal care, hair care, skin care and cosmetics, fabric care, household products and fine fragrances; its flavours portfolio serves bakery, beverages, confectionery, dairy, savoury and other food applications (PitchBook/company description). The company also makes and sells aroma ingredients (molecules used to build fragrances) through what it now reports as "Global Ingredients".
Company's own description
In its press releases the company describes itself as the largest Indian-origin fragrance and flavour company in India with over 100 years of experience, operating creation and development centres in India, Singapore, Amsterdam, Indonesia and Italy (Q3 FY26 press release, Feb 2026). Exchange-filed news summaries also describe it as the only Indian-origin company to have filed patents in the field of fragrances and novel aroma molecules (JM Financial/Capital Market, July 2026).
Business model and revenue model
Product-based B2B model: Revenue is almost entirely product sales of formulated compounds (bespoke fragrance/flavour blends) and ingredients. In Q1 FY27, "sales revenue" was INR 642.91 crore out of revenue from operations of INR 662.42 crore, with the balance from contract manufacturing and other operating income (Indian Chemical News, Aug 2026).
Mix (analyst characterisation): ~97% product sales, ~3% contract/toll manufacturing and other operating income; no material subscription or licensing revenue. Exact split by type: not publicly disclosed beyond the Q1 FY27 figures cited.
Brief-driven, sticky business: Fragrance houses win "briefs" from FMCG clients; once a fragrance is embedded in a consumer product, it is rarely switched because reformulation risks consumer rejection. This creates recurring, annuity-like revenue tied to clients' product volumes.
Customisation and scale: HDFC Securities (Jan 2022) cited a basket of over 9,000 products supplied to more than 4,500 customers.
Value-chain position
SHK sits in the middle of the value chain: it buys aroma chemicals, essential oils and naturals (some petrochemical-derived, some agricultural), manufactures a portion of its own aroma ingredients (backward integration via the Global Ingredients business), formulates compounds in creation centres, and sells to consumer brand owners who manufacture the end product. It does not sell to consumers except for a small online natural-flavours experiment under the Keva brand (HDFC Securities, 2022).
Customer types and end-markets
| Customer type | Description | Evidence |
|---|---|---|
| Large national & multinational FMCG | Soaps, detergents, personal care, foods | Company "About" description |
| Small & mid-sized FMCG (India) | Regional brands; key growth driver in FY25 | FY25 commentary (Value Educator summary) |
| F&F blenders and producers | Other fragrance houses buying ingredients/compounds | Company "About" description |
| Fine fragrance houses (Europe) | Served via CFF/Nova (Italy) and Holland Aromatics | HDFC Securities 2022 |
Independent characterisation. SHK is a mid-sized, India-centric fragrance compounder with a growing European arm, a small but fast-growing flavours business and a subscale captive-ingredients operation. Its economic model resembles the global majors (high gross margins of 40–43%, sticky customer embedding) but without their scale, R&D depth or balance-sheet strength. Its edge is cost, agility and intimacy with India's long tail of FMCG manufacturers; its weakness is earnings volatility from working-capital intensity, input-cost swings and operating disruptions.
Strategy
Stated strategic themes (paraphrased from FY2026 annual report and 2025–26 releases)
-
Build the next leg of growth through global creative reach — expanding Creative Development Centres in the US, UK, Germany and Middle East, regions which together with Europe represent ~75% of the global fragrance market (Q3 FY26 call).
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Capacity expansion — Vashivali reinstatement, Vanavate greenfield (India), Holland brownfield (Netherlands).
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Deepen customer engagement and innovation — innovation-led growth, small/mid-client acquisition in India, bespoke work for global brands.
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Scale Flavours — the higher-margin, faster-growing division, targeted at mid-teens growth.
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Financial discipline — improve cash conversion, strengthen internal accruals and reduce debt (new CFO's mandate).
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Portfolio simplification — divest non-core entities (Keva Ventures), prune low-margin products (Q4 FY26 one-off sale), rationalise the legal structure in Europe/US/UK.
Strategic initiatives register (last 24 months)
| Date | Initiative | Type | Detail / target |
|---|---|---|---|
| FY2025 | Keva Germany GmbH CDC | Platform investment | Serves Europe and Middle East |
| FY2025–26 | Vashivali reinstatement | Capacity | Post-fire rebuild |
| FY2025–26 | Vanavate greenfield | Capacity | New fragrance facility |
| FY2025–26 | Holland brownfield expansion | Capacity | Relieves European capacity constraints |
| FY2026 | US CDC | New market | First customer order in Q3 FY26 |
| FY2026 | UK CDC | New market | Keva UK restructured under Keva Fragrances |
| Feb 2026 | Middle East subsidiary | New market | Additional AED 5 million equity |
| Mar 2026 | CFF ownership restructuring | Structure | 17% stake moved to Keva Italy (≤ EUR 12.5 million) |
| Q4 FY26 | Portfolio optimisation | Margin | One-off INR 35 crore low-margin product sale |
| FY2026 | Pricing and cost optimisation | Margin | Response to Middle East-driven raw-material inflation |
| FY2026–27 | Strategic inventory build | Supply security | Commodity coverage amid geopolitical volatility |
| Jul 2026 | Keva Ventures divestment | Portfolio | Sold to promoter-group entity |
Management guidance and medium-term targets
| Item | Guidance | Date / source |
|---|---|---|
| FY2027 revenue | Double-digit growth | Q1 FY27 press release, Jul 2026 |
| FY2027 margins | Improvement vs FY2026 | Q1 FY27 press release |
| Debt | Begins declining from Q3 FY27, ~INR 25 crore per quarter | Kotak note on Q1 FY27 call |
| Tax rate | Below 30% over time as loss-making subsidiaries turn profitable | Kotak note |
| Gross margin | 43–45% long-term range | Q1 FY26 commentary |
| Earlier guidance (superseded) | 12–14% revenue CAGR; EBITDA margin 15–18%; ~INR 3,000 crore revenue by FY27 | Q4 FY25 call (Arthneeti); CRISIL-cited commentary Sep 2025 |
Assessment. The earlier INR 3,000 crore FY2027 aspiration now looks out of reach: it would require ~27% growth from FY2026's INR 2,368 crore. Margin guidance has been repeatedly pushed out (H2 FY26, then "more meaningfully from FY27"). Investors should treat current guidance — double-digit growth with margin improvement — as the operative benchmark.
ESG commitments
A Business Responsibility and Sustainability Report forms part of the FY2026 annual report.
Products & Services
Note: SHK does not publish public price lists; pricing is negotiated per brief and per kilogram. Launch years are given only where disclosed.
Fragrance division
| Product line | Description / capabilities | Target customer | Launch / latest | Flagship / named offerings |
|---|---|---|---|---|
| Personal-care fragrances | Compounds for soaps, shower gels, deodorants, talc | Indian & MNC FMCG | Legacy | Not individually branded |
| Hair-care fragrances | Shampoo, hair oil, conditioner compounds | FMCG | Legacy | — |
| Skin-care & cosmetics fragrances | Creams, lotions, colour cosmetics | Beauty brands | Legacy | — |
| Fabric-care fragrances | Detergents, softeners; encapsulation-type performance fragrances | Home-care majors | Legacy; strengthened via CFF | — |
| Household / air-care fragrances | Floor cleaners, dishwash, air fresheners, incense | Home-care brands | Legacy; Europe via Holland Aromatics | — |
| Fine fragrances | Perfume compositions for European and Middle Eastern houses | Perfume brands | Via CFF (2018–20), Nova (2021) | CFF/Nova creations |
| Bespoke fragrances (CDC-led) | Co-creation for international clients via CDCs | Global brands | US CDC first order Q3 FY26 | US, UK, Germany, Amsterdam, Singapore, Indonesia, Italy CDCs |
Global Ingredients (within Fragrance)
| Product line | Description | Target | Notes |
|---|---|---|---|
| Aroma chemicals / specialty molecules | Ingredients used in fragrance compounding, partly captive and partly sold externally | Other F&F houses | PFW Aroma Chemicals (NL); Mahad (India) |
| Novel aroma molecules | Patented molecules; company claims to be the only Indian-origin company patenting in this field | Captive & external | Patent counts not publicly disclosed in sources reviewed |
Flavour division
| Product line | Description | Target customer | Launch / latest | Flagship |
|---|---|---|---|---|
| Bakery flavours | Heat-stable flavours | Bakeries, biscuit makers | Legacy | — |
| Beverage flavours | Juices, carbonated, dairy beverages | Beverage makers | Legacy | — |
| Confectionery flavours | Candies, chocolates | Confectioners | Legacy | — |
| Dairy flavours | Ice creams, flavoured milk, yoghurt | Dairy companies | Legacy | — |
| Savoury & seasonings | Snack seasonings | Snack makers | Seasoning format 2020 | — |
| "Granulz" format | Granulated flavour format | Food makers | 2,020 | Granulz |
| "Auris" food flavours | Branded range of food flavours | Food processors | FY2019–20 | Auris |
| Natural flavours (online) | Small consumer-facing natural flavours sold on Amazon/Flipkart under Keva brand | Consumers/small businesses | c. 2021 | Keva naturals |
| Flavour R&D services | Application labs, NuTaste partnership (associate) | Food & beverage start-ups | NuTaste consolidated FY22; 40% sold 2024 | — |
Services
| Service | Description |
|---|---|
| Creative development / co-creation | Perfumers and flavourists develop bespoke formulations against client briefs at seven-plus CDCs |
| Regulatory & application support | IFRA compliance, stability testing, application trials (implied by business model; details not separately disclosed) |
| Contract manufacturing | Toll manufacturing for third parties (contract manufacturing revenue disclosed in Q1 FY27 results) |
Financial Narrative
All tables: consolidated, INR crore unless stated, fiscal years ended 31 March. Source: S&P Global Market Intelligence via StockAnalysis.com (last updated 28 Jul 2026), converted from INR millions, unless noted. Company-reported figures shown separately where relevant.
Income statement
FY2026 DPS: S&P lists no FY26 value; INR 2.00 is derived from dividends paid in FY26 (INR 27.7 crore ÷ 138.4 million shares) and AGM confirmation of FY26 interim dividends (an interim of INR 1.00 per share declared 6 Feb 2026; ScanX/IIFL). Treat as indicative.
Margins
Revenue CAGR FY2022–FY2026: 10.9% (analyst computation: (2,367.1 / 1,564.2)^(1/4) − 1).
Company-reported vs. standardised EBITDA (reconciliation view)
Sources: 70th Annual Report directors' report (IIFL reproduction); FY26 press release (Indian Chemical News, 21 May 2026). Company "Adjusted EBITDA" excludes other income, costs of new initiatives (new CDCs/geographies) and incremental insurance costs. Note: the directors' report text also uses INR 241.80 crore to describe "cash profit"; the reproduction appears to conflate the two lines — treat INR 241.8 crore as reported EBITDA per the financial-highlights table.
Quarterly progression (company-reported, INR crore)
Sources: Q1 FY26 results (Trendlyne); Q2/Q3 FY26 (Kotak Neo); Q3 FY26 (AlphaStreet); Q4 FY26 (ScanX/Indian Chemical News); Q1 FY27 (ICN, Kotak, ScanX); business updates (Jul 2025, Oct 2025, Apr 2026, Jul 2026). Q4 FY26 EPS is analyst-derived from PAT. Q1 FY27 net debt: company business update says ~INR 864 crore; Kotak's note cites ~INR 850 crore — a discrepancy likely reflecting different cash definitions. Q3 FY26 revenue: AlphaStreet INR 583.8 crore vs 5paisa INR 564.4 crore — the latter appears to be sales excluding other operating income.
Key quarterly observations.
Q4 FY26: included a one-off ~INR 35 crore sale of low-margin products under a portfolio-optimisation exercise, flattering revenue but not margins; PAT collapsed to INR 1.8 crore.
FY2026 exceptional items: netted to a gain of INR 32.06 crore — insurance realisation for the Vashivali fire, partly offset by GST input-credit reversals and the cost of implementing India's new labour codes (5paisa, May 2026).
Q1 FY27: included an exceptional gain of INR 29.95 crore (vs INR 2.11 crore in Q1 FY26), so the 77% PAT growth overstates underlying improvement. Underlying EBITDA still rose 21% to ~INR 88.7 crore on Flavour strength. Employee costs rose 25.6% YoY to ~INR 100 crore, outpacing revenue (ScanX).
Balance sheet
Company-basis net debt (excluding leases): INR 789 crore at 31 Mar 2026 (Q4 FY26 business update) versus S&P INR 964 crore including ~INR 178 crore of leases.
Ratios
All ratios are analyst computations from S&P data. ROIC uses the reported effective tax rate (25.2% statutory rate for FY22 because of a tax credit that year); invested capital = equity + total debt − cash. Inventory/payable days use S&P cost of revenue (materials-heavy), so they are higher than CRISIL's measure (inventory of 144 days, gross current assets of 261 days at 31 Mar 2025).
Trend commentary
Revenue. Growth has been consistently double-digit in three of five years, compounding at ~11%. FY2022 (+18%) was driven by consolidation of CFF, Nova and Holland Aromatics; FY2025 (+15%) by domestic Fragrance (+19% in India) and a recovery in Flavours (+43%), despite Q1 FY25 disruption from the Vashivali fire which shifted execution into Q2. FY2026 (+11.5% company basis) included a one-off INR 35 crore low-margin sale in Q4.
Gross margin. Gross margin oscillates with raw-material cycles: it fell to 39.5% in FY2023 amid aroma-chemical inflation, recovered to 43.1% in FY2024, and slipped to 40.9% (S&P basis; company says 41.5%) in FY2026. Management targets a longer-term 43–45% band (Q1 FY26 commentary), and flagged in May 2026 that Middle East–linked raw-material inflation would hit coming quarters.
Operating margin and EBITDA — the core concern. S&P-basis EBITDA margin fell from 15.8% (FY24) to 9.1% (FY26). The drivers are (1) investment in new CDCs and geographies (US, UK, Germany, Middle East), which management says depress EBITDA by roughly three percentage points (Q1 FY26 adjusted margin ~16% vs reported ~13%); (2) incremental insurance premiums after the fire; (3) employee-cost inflation; and (4) under-absorption while Vashivali was reinstated and the Vanavate greenfield site was being built. SG&A rose from INR 247 crore (FY24) to INR 375 crore (FY26), +52% versus revenue +29%.
Net income. Earnings have been volatile and largely driven by one-offs: FY2022 benefited from a tax credit; FY2023 suffered INR 19.6 crore of merger/restructuring charges; FY2025 absorbed ~INR 60.6 crore of unusual items (fire losses) partly offset by insurance; FY2026 gained INR 35.9 crore of unusual items (insurance). Underlying EPS has been roughly flat at INR 5–6 for three years.
Balance sheet and leverage. Net debt (company basis) rose from INR 666 crore (Jun 2025) to INR 864 crore (Jun 2026). Capex of INR 206.5 crore in FY2026 was more than double FY2025, funding Vashivali reinstatement, the Vanavate greenfield and Holland brownfield expansion; construction-in-progress rose to INR 90.4 crore. Interest coverage fell from 8.5x (FY24) to 2.6x (FY26), and net debt/EBITDA (S&P basis) reached ~4.5x — high for an AA- rated company. Lease liabilities more than doubled in FY2026 (to ~INR 178 crore), reflecting new CDC leases.
Cash flow. FY2026 operating cash flow recovered to INR 263 crore as inventory fell and insurance receipts (other receivables collapsed from INR 102 crore to INR 1.7 crore) came in, but payables also fell sharply (DPO 120 → 87 days), meaning suppliers were paid down. Management has stated a priority of improving cash conversion, strengthening internal accruals and reducing debt, while warning that strategic inventory build-up (commodity coverage amid supply volatility) will elevate working capital near term (CFO commentary, May and July 2026).
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Segment Overview
| Segment | Contents | Key entities |
|---|---|---|
Fragrance (core) | Fragrance compounds for personal care, fabric care, household, fine fragrance; includes European operations (CFF, Nova, Holland Aromatics) | SHK standalone, Keva Fragrances Pvt Ltd, Keva Europe B.V., Keva Italy/CFF Keva Italy, Holland Aromatics, Keva Fragrance Industries Pte (Singapore), Keva UK, Keva USA, Keva Germany, Keva Middle East |
Global Ingredients (reported within Fragrance) | Aroma molecules and specialty ingredients sold to third parties | PFW Aroma Chemicals B.V.; Mahad facility |
Flavour | Flavour systems for bakery, beverages, confectionery, dairy, savoury | Keva Flavours Pvt Ltd |
Revenue by Segment
| Segment | FY2024 | FY2025 | FY2026 |
|---|---|---|---|
Fragrance segment revenue (INR Cr) | 1,692 | 1,927 | 2,119 |
Flavour segment revenue (INR Cr) | 130 | 185 | 240 |
Total revenue from operations (INR Cr) | 1,841 | 2,123 | 2,368 |
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View Subscription PlansResults by Segment and Segment Margins & Growth (%)
| Metric | FY2025 | FY2026 |
|---|---|---|
Fragrance segment result (INR Cr) | — | 152.63 |
Flavour segment result (INR Cr) | — | 57.72 |
Fragrance segment result margin (%) | — | 7.2 |
Flavour segment result margin (%) | — | 24.0 |
Fragrance share of revenue (%) | 90.8 | 89.5 |
Flavour share of revenue (%) | 8.7 | 10.1 |
Fragrance YoY growth (%) | 13.9 | 9.9 |
Flavour YoY growth (%) | ~43 | 29.6 |
Segment Revenue
| Segment | Q1 FY26 | Q1 FY27 | YoY (%) |
|---|---|---|---|
Fragrance (excl. Global Ingredients) | ~495 | 539 | 9.0 |
Flavour | 69 | 112 | 63.2 |
Global Ingredients | 15 | 8 | -44.7 |
Revenue from operations | 580.5 | 662.4 | 14.1 |
Income Statement and Margin Analysis (%)
| Metric | FY2022 | FY2023 | FY2024 | FY2025 | FY2026 |
|---|---|---|---|---|---|
Revenue (INR Cr) | 1,564.2 | 1,682.2 | 1,836.1 | 2,119.4 | 2,367.1 |
Revenue growth (%) | 18.3 | 7.5 | 9.2 | 15.4 | 11.7 |
Gross profit (INR Cr) | 628.2 | 664.7 | 791.7 | 906.2 | 968.6 |
Operating income EBIT (INR Cr) | 159.0 | 133.0 | 220.7 | 206.5 | 139.3 |
EBITDA S&P basis (INR Cr) | 210.3 | 195.3 | 290.1 | 275.9 | 215.9 |
Pre-tax income (INR Cr) | 132.3 | 104.4 | 183.3 | 114.8 | 112.4 |
Net income attributable (INR Cr) | 148.6 | 61.2 | 122.4 | 73.2 | 69.3 |
EPS basic (INR) | 10.81 | 4.53 | 8.93 | 5.29 | 5.00 |
EPS diluted (INR) | 10.81 | 4.53 | 8.93 | 5.29 | 5.00 |
Dividend per share (INR) | 0.75 | 2.00 | 0.75 | 1.00 | 2.00 |
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View Subscription PlansMargin Analysis (%)
| Metric | FY2022 | FY2023 | FY2024 | FY2025 | FY2026 |
|---|---|---|---|---|---|
Gross margin (%) | 40.2 | 39.5 | 43.1 | 42.8 | 40.9 |
Operating margin (%) | 10.2 | 7.9 | 12.0 | 9.7 | 5.9 |
EBITDA margin S&P basis (%) | 13.4 | 11.6 | 15.8 | 13.0 | 9.1 |
Net margin (%) | 9.5 | 3.6 | 6.7 | 3.5 | 2.9 |
Effective tax rate (%) | -13.0 | 39.7 | 32.5 | 35.5 | 38.5 |
Income Statement and Margin Analysis (%) (FY2025–FY2026)
| Metric | FY2025 | FY2026 |
|---|---|---|
Revenue from operations, company (INR Cr) | 2,123.4 | 2,368.3 |
Reported EBITDA, company (INR Cr) | 297.0 | 241.8 |
Adjusted EBITDA, company (INR Cr) | 335 | 323 |
Adjusted EBITDA margin, company (%) | 15.9 | 13.9 |
EBITDA S&P basis (INR Cr) | 275.9 | 215.9 |
PAT, company (INR Cr) | 73.01 | 69.15 |
Income Statement and Margin Analysis (%) (Quarterly)
| Metric | Q1 FY26 | Q2 FY26 | Q3 FY26 | Q4 FY26 | Q1 FY27 |
|---|---|---|---|---|---|
Revenue from operations (INR Cr) | 580.5 | 554.2 | 583.8 | 649.9 | 662.4 |
Reported EBITDA (INR Cr) | 76.4 | — | 56.1 | 64.6 | 88.7 |
Reported EBITDA margin (%) | 13.2 | — | 9.7 | 10.3 | 13.4 |
PAT (INR Cr) | 25.55 | 9.17 | 32.63 | 1.80 | 45.40 |
EPS (INR) | 1.85 | 0.66 | 2.36 | 0.13 | 3.28 |
Net debt company basis (INR Cr) | 666 | 698 | — | 789 | 864 |
Balance Sheet and Per-Share Data
| Metric | FY2022 | FY2023 | FY2024 | FY2025 | FY2026 |
|---|---|---|---|---|---|
Total assets (INR Cr) | 2,297.1 | 2,222.0 | 2,402.5 | 2,684.9 | 2,913.2 |
Cash & short-term investments (INR Cr) | 119.4 | 87.5 | 111.2 | 86.5 | 64.6 |
Short-term debt incl. current LTD & leases (INR Cr) | 287.2 | 261.7 | 461.0 | 594.4 | 679.7 |
Long-term debt incl. leases (INR Cr) | 410.8 | 358.3 | 204.9 | 237.8 | 349.2 |
Total debt incl. leases (INR Cr) | 698.0 | 620.0 | 665.8 | 832.2 | 1,028.9 |
Net debt incl. leases (INR Cr) | 578.7 | 532.5 | 554.6 | 745.8 | 964.3 |
Total equity (INR Cr) | 1,093.7 | 1,102.6 | 1,214.2 | 1,272.4 | 1,362.4 |
Goodwill (INR Cr) | 289.5 | 302.9 | 304.7 | 310.9 | 360.5 |
Other intangibles (INR Cr) | 256.4 | 228.0 | 215.1 | 188.3 | 184.9 |
Inventory (INR Cr) | 555.4 | 603.1 | 656.9 | 717.7 | 665.1 |
Trade receivables (INR Cr) | 461.3 | 438.2 | 489.6 | 505.9 | 635.0 |
Property plant & equipment (INR Cr) | 409.5 | 408.8 | 425.7 | 498.9 | 732.6 |
Working capital (INR Cr) | 507.3 | 497.8 | 429.0 | 444.5 | 311.2 |
Book value per share (INR) | 74.96 | 78.74 | 87.62 | 91.89 | 98.39 |
Cash Flow
| Metric | FY2022 | FY2023 | FY2024 | FY2025 | FY2026 |
|---|---|---|---|---|---|
Operating cash flow (INR Cr) | 50.2 | 196.7 | 107.5 | 15.7 | 263.1 |
Capital expenditure (INR Cr) | 26.8 | 68.8 | 60.9 | 95.7 | 206.5 |
Free cash flow (INR Cr) | 23.4 | 127.9 | 46.5 | -80.0 | 56.7 |
Cash acquisitions (INR Cr) | 161.2 | 36.6 | 39.1 | 0 | 0 |
Dividends paid (INR Cr) | 10.6 | 10.4 | 27.7 | 10.4 | 27.7 |
Share buybacks (INR Cr) | 60.9 | 0 | 0 | 0 | 0 |
Change in working capital (INR Cr) | -129.8 | 17.6 | -148.9 | -238.9 | 19.0 |
Cash interest paid (INR Cr) | 12.1 | 19.9 | 33.9 | 44.4 | 52.1 |
Returns & Leverage Ratios (%) and Financial Ratios (x)
| Ratio | FY2022 | FY2023 | FY2024 | FY2025 | FY2026 |
|---|---|---|---|---|---|
ROE year-end equity (%) | 13.6 | 5.6 | 10.1 | 5.8 | 5.1 |
ROA year-end assets (%) | 6.5 | 2.8 | 5.1 | 2.7 | 2.4 |
ROIC after-tax EBIT / invested capital (%) | 7.1 | 4.9 | 8.4 | 6.6 | 3.7 |
Current ratio (x) | 1.70 | 1.70 | 1.46 | 1.39 | 1.27 |
Debt to equity incl. leases (x) | 0.64 | 0.56 | 0.55 | 0.65 | 0.76 |
Net debt to EBITDA S&P basis (x) | 2.75 | 2.73 | 1.91 | 2.70 | 4.47 |
Interest coverage EBIT / interest (x) | 15.8 | 8.6 | 8.5 | 4.2 | 2.6 |
Asset turnover (x) | 0.68 | 0.76 | 0.76 | 0.79 | 0.81 |
Days sales outstanding (days) | 107.6 | 95.1 | 97.3 | 87.1 | 97.9 |
Days inventory outstanding (days) | 216.6 | 216.3 | 229.6 | 215.9 | 173.6 |
Days payables outstanding (days) | 137.3 | 131.0 | 124.1 | 120.3 | 86.5 |
Cash conversion cycle (days) | 186.9 | 180.4 | 202.8 | 182.7 | 185.0 |
Revenue by Region
| Region | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|
India revenue (INR Cr) | 840 | 965 | 1,100 | 1,230 |
Europe revenue (INR Cr) | 409 | 405 | 463 | 498 |
Rest of world revenue derived (INR Cr) | 315 | 312 | 273 | 391 |
Region growth
| Region growth | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
India YoY growth (%) | 14.9 | 14.0 | 11.8 |
Europe YoY growth (%) | -1.0 | 14.3 | 7.5 |
Geographic Revenue
| Region | Q1 FY26 | Q1 FY27 | YoY (%) |
|---|---|---|---|
India | 346 | 363 | 4.8 |
Europe (sales into region) | 120 | 148 | 23.7 |
Rest of World | 97 | 140 | 44.1 |
Capital Markets
| Measure | Value | Date / source |
|---|---|---|
Last price | INR 141.02 | 30 Sep 2026, StockAnalysis |
52-week range | INR 111.98 – 275.50 | 11 Aug 2026, IIFL |
1-year return | -27.7% | as of 11 Aug 2026, IIFL |
3-year CAGR | +5.8% | as of 11 Aug 2026, IIFL |
5-year CAGR | +2.5% | as of 11 Aug 2026, IIFL |
52-week change | -43.5% | as of 10 Jul 2026, StockAnalysis |
Beta (5-year) | 0.39 | StockAnalysis |
Reaction to Q1 FY27 results | +13.1% to INR 162.27 | 29 Jul 2026 |
Valuation Multiples
| Multiple | SHK | Basis |
|---|---|---|
Market cap (INR Cr) | ~1,952 | 138.42 million shares |
Enterprise value (INR Cr) | ~2,916 |
|
P/E trailing (x) | ~21.9 | TTM EPS INR 6.43 (to Jun 2026, incl. exceptionals) |
EV/EBITDA trailing (x) | ~13.0 | TTM S&P EBITDA INR 224.5 crore |
EV/Sales trailing (x) | ~1.19 | TTM revenue INR 2,449 crore |
P/B (x) | ~1.43 | BVPS INR 98.39 (Mar 2026) |
Kotak FY27E / FY28E EV/EBITDA (x) | 10.1 / 7.7 | Kotak, 30 Jul 2026 (at prevailing price then) |
Analyst Ratings & Targets
| Broker | Rating | Fair value | Date |
|---|---|---|---|
Kotak Securities | BUY | INR 270 (25x June 2028E P/E) | 30 Jul 2026 |
HDFC Securities | — | — | Jan 2022 |
Per-Share Data and Dividends & Capital Returns
| Metric | FY2022 | FY2023 | FY2024 | FY2025 | FY2026 |
|---|---|---|---|---|---|
Dividend per share (INR) | 0.75 | 2.00 | 0.75 | 1.00 | 2.00 |
Dividends paid (INR Cr) | 10.6 | 10.4 | 27.7 | 10.4 | 27.7 |
Payout ratio of net income (%) | 7.1 | 17.0 | 22.6 | 14.2 | 40.0 |
Buybacks (INR Cr) | 60.9 | 0 | 0 | 0 | 0 |
Credit Ratings
| Agency | Instrument | Rating | Outlook | Date |
|---|---|---|---|---|
CRISIL | Long-term bank facilities (INR 372 crore) | AA- | Stable | 26 Sep 2025 |
Moody's / S&P / Fitch | — | Not rated | — | — |
Analyst Conclusions
Management guidance (FY2027)
Double-digit revenue growth; improved margins versus FY2026; net debt to start declining from Q3 FY27 at ~INR 25 crore per quarter; tax rate trending below 30% over time; gross margin aspiration of 43–45%.
Consensus
Formal consensus is not publicly disclosed. Kotak raised FY27E EBITDA/net income by 11.3%/25% after Q1 and sees FY27E–FY28E EV/EBITDA of 10.1x/7.7x — implying expected EBITDA growth of roughly 30% from FY27 to FY28.
Bull case
-
Operating leverage on CDC investments: if the ~3-point margin drag from new initiatives fades as US/UK/Germany/ME centres scale, EBITDA margin could return toward the 15–16% range that CRISIL-cited commentary targets, roughly doubling FY26 S&P EBITDA.
-
Flavours as profit engine: a ~24% margin segment growing 30–60% (FY26 +30%; Q1 FY27 +63%) shifts mix materially.
-
Valuation: at ~1.4x book and ~13x trailing EV/EBITDA (falling to ~10x on FY27E), the stock trades at a steep discount to global F&F peers despite similar gross margins.
Bear case
-
Earnings quality: FY26 and Q1 FY27 PAT were propped up by insurance-related exceptional gains; Q4 FY26 PAT was only INR 1.8 crore. Underlying ROE is ~5%.
-
Leverage trap: net debt rose ~30% in a year to INR 864 crore with coverage at 2.6x; deleveraging guidance has been deferred before, and strategic inventory builds absorb cash.
-
Core-market erosion: domestic Fragrance growth fell to ~6% in FY26 and India grew only 4.8% in Q1 FY27, while Global Ingredients is shrinking — growth is increasingly dependent on unproven overseas ventures.
Catalysts and monitorables (next 12 months)
| Item | What to watch |
|---|---|
| Q2 FY27 business update (Oct 2026) & results (Nov 2026) | Revenue growth vs double-digit guidance; net debt direction |
| Raw-material costs | Gross margin holding ≥42% despite Middle East inflation |
| Debt reduction from Q3 FY27 | ~INR 25 crore per quarter decline |
| Vanavate / Vashivali / Holland capacity | Commissioning and utilisation |
| US CDC | Order wins and revenue disclosure |
| Promoter pledges | Changes in pledged quantity |
| Keva Ventures sale terms | Consideration and fairness |
| Auditor transition | First audit under new statutory auditor (FY2027) |
| CRISIL rating review (~Sep 2026–2027) | Any outlook change given higher leverage |
Analyst verdict
S H Kelkar is a franchise business trapped in a capital-intensive transition. Its franchise is genuine: India's largest domestic fragrance house, embedded with thousands of FMCG customers, earning gross margins of 40–43% that are not far below global leaders, plus a Flavours division that now delivers roughly a quarter of segment profit on a tenth of revenue. Revenue has compounded at ~11% for four years through a pandemic aftermath, a raw-material shock and a major plant fire.
The problem is everything below gross profit. S&P-basis EBITDA margin has halved from its FY2024 peak; return on equity is ~5%; net debt has risen to INR 864 crore while interest coverage slid to 2.6x. Reported profits in FY2026 and Q1 FY27 relied on insurance-related exceptional gains. Management's strategy — buying growth through overseas creative centres and new capacity — is directionally sensible (the US, UK and Europe dominate global fragrance demand), but SHK is funding it with debt and working capital rather than internal accruals, and with a domestic core that is slowing.
Q1 FY27 was the first quarter in a year that showed operating leverage: revenue +14%, EBITDA +21%, Flavours +63%, Europe +24%. If management delivers its FY2027 promises — double-digit growth, better margins and debt falling from Q3 — the current valuation (~1.4x book, ~13x trailing EV/EBITDA) leaves meaningful upside, consistent with Kotak's INR 270 fair value. If margins stall under raw-material inflation while inventories rise, leverage becomes the binding constraint and governance flags (promoter pledges, related-party divestments, finance-team churn) will weigh further.
Verdict: a speculative recovery situation rather than a quality compounder. Evidence of sustained margin improvement and an actual decline in net debt over the next two quarters should be the precondition for a constructive stance.
APPENDIX — SOURCES
1: S H Kelkar Q1 FY27 earnings presentation & press release (NSE archives) — 28 Jul 2026
2: Indian Chemical News — Q1 FY27 results — 3 Aug 2026
3: Indian Chemical News — FY26 results — 21 May 2026
4: Kotak Securities Q1 FY27 one-pager (BUY, FV INR 270) — 30 Jul 2026
5: StockAnalysis.com (S&P Global Market Intelligence) — income statement, balance sheet, cash flow, statistics — Jul–Sep 2026
6: 70th Annual Report directors' report (via IIFL/Goodreturns) — FY2026
7: 69th Annual Report directors' report (via Arihant) — FY2025
8: ScanX — FY26 results, Q1 FY27 results, AGM, CFF stake sale, CFO changes — 2025–2026
9: Q3 FY26 press release & presentation (NSE archives); AlphaStreet; GuruFocus call summary — Feb 2026
10: Kotak Neo — Q2 and Q3 FY26 results summaries — Nov 2025 – Feb 2026
11: NSE filing — insurance interim relief — 3 Apr 2025
12: Equity Bulls — Vashivali fire announcement — 23 Apr 2024
13: CRISIL rating rationales — Jun 2024; Sep 2025
14: Upstox, Equitymaster, Tapetide, Stockezee — shareholding — 2022–2026
15: Arihant/CMOTS, NSE governance filing, MarketScreener, Simply Wall St — board & management — 2025–2026
16: NSE filing — CFF 17% stake sale — 13 Mar 2026
17: BSE filing — NuTaste 40% stake sale — 24 Jun 2024
18: Q3/Q4 FY22 press releases (BSE) — CFF, Nova, Holland Aromatics, NuTaste — Feb & May 2022
19: HDFC Securities initiation report — Jan 2022
20: PitchBook company profile — accessed 2026
21: MarketScreener — geographic revenue history — accessed 2026
22: IIFL — share price returns and 52-week range — Aug 2026
23: Company business updates (Jul 2025, Oct 2025, Apr 2026, Jul 2026) — as dated
24: Tradejini blog — market size figures — 2025
25: Arthneeti — Q4 FY25 call guidance summary — 2025
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View Subscription PlansExecutive Leadership
Executive Leadership Team
| Name | Title | Tenure | Background | Age |
|---|---|---|---|---|
Kedar Ramesh Vaze | Whole-Time Director & Group CEO | WTD since Sep 2010; CEO since Sep/Oct 2014 | IIT Bombay graduate; promoter family; director of multiple group entities incl. PFW Aroma Chemicals BV, Keva Fragrances, Keva Flavours | 52 (born 12 Nov 1973) |
Jagdish Agarwal | Group Chief Financial Officer | Since 2 Dec 2025 | ~28 years' experience across sectors (prior employers not specified in sources) | — |
Deepti Chandratre | Global Legal Counsel & Company Secretary (Interim CFO Oct–Dec 2025) | Legal counsel since 2011; CS since May 2025 | Legal | — |
Avani Mainkar | Listed by MarketScreener in a controller/audit role since 2019 | Since Jun 2019 | — | — |
“—” = not publicly disclosed.
Board of Directors
| Name | Category | Notes |
|---|---|---|
Ramesh Vinayak Vaze | Chairman; Non-Executive, Non-Independent (promoter) | Born 30 Apr 1941 (age 85); on board since 1981; reappointed at 70th AGM (Jul 2026) |
Kedar Ramesh Vaze | Executive Director (WTD & Group CEO) | Promoter; holds 14,060,131 shares (10.16%) |
Prabha Ramesh Vaze | Non-Executive, Non-Independent (promoter) | Born 19 Jun 1946 (age 80); director since 1980 |
Amit Gulati | Non-Executive, Non-Independent | Nominating shareholder not disclosed in sources |
Pallavi Gokhale | Non-Executive, Non-Independent | Joined 2025 per aggregator data |
Shrikant Oka | Independent | — |
Deepak Raj Bindra | Independent | — |
Vasant V Gujarathi | Independent | — |
Neela Bhattacherjee | Independent | — |
Board & Management Changes
| Date | Change | Context |
|---|---|---|
30 Jul 2025 | CFO Rohit Saraogi resigns | Departed for another opportunity |
7 Oct 2025 | Deepti Chandratre named Interim CFO (in addition to legal/CS roles) | Bridge appointment |
2 Dec 2025 | Jagdish Agarwal appointed Group CFO | Mandate: working capital, cash conversion, deleveraging |
31 Jul 2026 | Ramesh Vaze reappointed (retires by rotation); new statutory auditors ratified | Auditor rotation from Deloitte |
Major Shareholders
| Holder category (30 Jun 2026) | Stake (%) |
|---|---|
Promoter & promoter group | 54.87 |
Foreign institutional investors | 5.92 |
Mutual funds | 5.67 |
Other domestic institutions | 0.34 |
Retail & others | 33.21 |
Shareholding Trend
| Holder category trend | Sep 2025 | Dec 2025 | Mar 2026 | Jun 2026 |
|---|---|---|---|---|
Promoters (%) | 54.87 | 54.87 | 54.87 | 54.87 |
FII (%) | 7.36 | 6.79 | 7.42 | 5.92 |
Mutual funds (%) | 4.50 | 5.56 | 4.75 | 5.67 |
Retail & other (%) | 32.08 | 32.33 | 32.53 | 33.21 |
Competitive Landscape
Key Competitors
| Competitor | HQ | Segment overlap | Relative positioning |
|---|---|---|---|
Givaudan | Switzerland | Fragrance, flavour | Global #1; strong India presence |
dsm-firmenich | Switzerland/Netherlands | Fragrance, flavour, ingredients | Global #2; former SHK shareholder via Firmenich |
IFF | USA | Fragrance, flavour | Global #3 |
Symrise | Germany | Fragrance, flavour, aroma molecules | Global #4 |
Takasago | Japan | Fragrance, flavour, aroma chemicals | Asian major |
Mane | France | Fragrance, flavour | Family-owned; active in India |
Robertet | France | Naturals, fine fragrance | Naturals specialist |
Oriental Aromatics | India | Aroma chemicals, fragrances | Domestic listed peer |
Privi Speciality Chemicals | India | Aroma chemicals | Ingredients peer (Global Ingredients overlap) |
Unorganised Indian compounders | India | Fragrance for regional FMCG | Price-based competition |
Peer Comparison FY2026
| Metric | S H Kelkar FY2026 | Givaudan CY2024 | IFF CY2024 | Symrise CY2024 |
|---|---|---|---|---|
Revenue | INR 2,368 crore (~USD 0.28 bn) | CHF 7.4 bn | USD 11.5 bn | EUR 5.0 bn |
Revenue growth (%) | 11.5 | ~12 (like-for-like) | ~flat reported | ~6 reported |
EBITDA margin (%) | 10.2 reported / 13.9 adjusted | ~23 | ~19 (adjusted) | ~21 |
R&D intensity (% of sales) | — | ~8 (approx.) | ~6 (approx.) | ~6 (approx.) |
