SH Kelkar & Company (SHK), India's largest Indian-origin Fragrance & Flavour Company, has unveiled a series of strategic moves aimed at aligning its group entities with business units, alongside reporting robust financial results for the first quarter.

Corporate Restructuring

The company's Board of Directors has approved an internal corporate restructuring plan that includes:

1. Sale of Keva UK Limited: Keva Europe BV will sell its entire stake in Keva UK Limited to Keva Fragrances Private Limited for €2 million (approximately Rs. 20.48 crore).

2. Sale of Keva USA Inc.: SH Kelkar will sell its entire stake in Keva USA Inc. to Keva Fragrances Private Limited for $2 million (approximately Rs. 17.54 crore).

3. Incorporation of Keva Middle East FZE: Keva Fragrances Private Limited will incorporate Keva Middle East FZE in the United Arab Emirates with an investment of AED 150,000.

These moves are expected to streamline operations and enhance the company's global footprint in the fragrance and flavour industry.

Q1 Financial Highlights

For the quarter ended June 30, SH Kelkar reported:

• Consolidated revenue from operations of Rs. 580.63 crore, up 23.5% year-on-year
• EBITDA of Rs. 76.40 crore, with an EBITDA margin of 13.2%
• Profit after tax of Rs. 25.55 crore, compared to a loss in the same quarter last year

The company's performance was driven by strong growth in both its Fragrance and Flavours segments.

Management Commentary

Kedar Vaze, Whole Time Director and CEO at SH Kelkar, commented on the results: "In Q1, the Company reported consolidated revenue of Rs. 579 crore, achieving growth of approximately 14.8% over the H1 average. This performance was supported by healthy traction in the domestic market across both our Fragrance and Flavour divisions."

He added, "Gross margin improved by 94 bps QoQ to 42.4%, moving closer to our longer-term trend range of 43-45%, supported by stabilising raw material availability, selective pricing actions, and an optimised product mix."

Future Outlook

The company remains optimistic about its future prospects, with expectations of margin improvement in the second half and more meaningfully from the following fiscal year onwards. SH Kelkar is committed to leveraging its enhanced capacities and innovation-led approach to strengthen its global footprint and deliver sustained value to stakeholders.

The corporate restructuring initiatives, coupled with strong financial performance, position SH Kelkar well for continued growth in the fragrance and flavour industry both domestically and internationally.

SH Kelkar & Company , a prominent player in the fragrance and flavor industry, has reported a robust financial performance in its latest quarterly results. The company's consolidated revenues reached ₹5.74 billion, marking a significant 14% year-over-year growth.

Revenue Growth

The company's consolidated revenues of ₹5.74 billion demonstrate SH Kelkar's strong market position and its ability to drive growth in the fragrance and flavor sector. This 14% increase from the previous year's corresponding quarter indicates a positive trajectory for the company's operations and market demand for its products.

European Business Stability

In addition to the overall revenue growth, SH Kelkar highlighted the stability of its European business during the same period. This is a noteworthy development, especially considering the economic challenges and uncertainties faced by many businesses in the European market.

The stability in the European operations suggests that SH Kelkar has successfully maintained its market presence and customer base in the region. This could be attributed to factors such as product quality, customer relationships, or effective market strategies tailored to the European market.

Industry Implications

The positive performance of SH Kelkar, particularly in revenue growth, may be indicative of broader trends in the fragrance and flavor industry. As consumer goods and personal care products continue to be in demand, companies supplying essential ingredients like fragrances and flavors are likely to benefit.

SH Kelkar's ability to achieve double-digit growth in this environment speaks to its competitive position and potentially its ability to capitalize on market opportunities or expand its product offerings.

While the company has reported impressive top-line growth, it's important to note that the full picture of SH Kelkar's financial health would require additional information on profitability, margins, and other key financial metrics.

As SH Kelkar continues to navigate the global market, investors and industry observers will likely keep a close eye on how the company maintains its growth momentum and leverages its stable European operations for future expansion and profitability.