SH Kelkar & Company (SHK), a leading fragrance and flavor company, has reported a mixed set of financial results for the second quarter. The company saw a significant decline in net profit despite a marginal increase in revenue, reflecting challenging market conditions and cost pressures.

Financial Highlights

For the quarter ended September 30, SH Kelkar reported the following key financial metrics:

The company's net profit saw a sharp decline of 77% year-over-year, dropping to ₹91.80 crore from ₹398.00 crore in the same quarter last year. This significant decrease in profitability comes despite a modest 2.2% increase in revenue, which rose to ₹554.00 crore from ₹542.00 crore in the corresponding period.

Operational Performance

The EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) for the quarter stood at ₹527.00 crore, marking a substantial decrease of 34.8% compared to ₹808.00 crore in Q2 of the previous fiscal year. This decline in EBITDA indicates increased cost pressures and operational challenges faced by the company.

The EBITDA margin compressed significantly, falling to 9.51% from 14.89% in the previous year, representing a decrease of 538 basis points. This margin contraction suggests that the company is facing difficulties in maintaining its operational efficiency and cost management.

Market Implications

The sharp decline in profitability despite revenue growth may raise concerns among investors about SH Kelkar's ability to manage costs effectively in the current economic environment. The company may need to focus on operational efficiency and cost optimization strategies to improve its profit margins in the coming quarters.

Looking Ahead

While the company has not provided specific guidance for the future, the management may need to address the challenges that led to the profit decline and margin compression. Investors and analysts will likely be watching closely for any strategic initiatives or market developments that could impact SH Kelkar's performance in the upcoming quarters.

As the fragrance and flavor industry continues to evolve, SH Kelkar's ability to innovate, manage costs, and capitalize on market opportunities will be crucial for its future growth and profitability.

SH Kelkar & Company Limited (SHK), India's largest fragrance and flavours company of Indian origin, has reported a strong financial performance for the first half of the fiscal year 2025-26. The company's latest business update reveals significant growth and operational stability.

Financial Highlights

• Revenue Growth: SHK's consolidated revenues for H1 FY2026 reached ₹1,140.00 crores, marking a growth of approximately 13% compared to the same period last year.
• Gross Margins: The company maintained steady gross margins on a sequential basis, indicating consistent operational efficiency.
• Net Debt: As of September 30, 2025, SHK's net debt stood at approximately ₹698.00 crores.

Key Operational Updates

• Business Stability: The steady gross margins suggest that SHK has been able to manage its costs effectively despite potential market fluctuations.
• Market Position: As the largest Indian-origin Fragrance and Flavours Company in India, SHK's growth reflects positively on its market standing and operational capabilities.

Corporate Governance

SHK disclosed changes in its key managerial personnel:

• New Appointment: Ms. Deepti Chandratre has been appointed as the Interim Chief Financial Officer, effective October 07, 2025. She will continue her roles as Global Legal Counsel and Company Secretary.
• Leadership Profile: Ms. Chandratre brings over 19 years of experience in legal and corporate secretarial functions, including mergers, acquisitions, and corporate restructurings.

Industry Implications

The robust growth of SH Kelkar & Company suggests a positive trend in the fragrance and flavours industry, potentially indicating increased consumer demand in related sectors such as personal care, food, and beverages.

Investor Considerations

While the revenue growth is impressive, investors should note:

• The company's net debt position
• The interim nature of the CFO appointment

Conclusion

SH Kelkar & Company's strong performance in H1 FY2026 demonstrates its resilience and growth potential in the fragrance and flavours market. The company's ability to maintain margins while achieving significant revenue growth positions it well for future expansion. However, investors should keep an eye on the debt levels and any further management changes that may impact the company's strategic direction.