S H Kelkar Reports Strong Q1 FY27 Performance, Maintains Double-Digit Growth Outlook
S H Kelkar & Company Limited (Keva) has released the transcript of its Q1 FY27 earnings conference call, where the management highlighted a strong start to the financial year despite global geopolitical uncertainties and supply chain challenges.
The company reported healthy revenue growth, improved profitability, and reaffirmed its focus on long-term expansion through investments in research, innovation, and international markets.
Q1 FY27 Consolidated Financial Highlights
S H Kelkar reported a strong financial performance in the first quarter of FY27. Revenue from operations increased 14.1% year-on-year to ₹662.42 crore, compared with ₹580.50 crore in the corresponding quarter last year, driven by healthy growth across its fragrance and flavour businesses. Total income stood at ₹663.23 crore, while total expenses rose to ₹623.88 crore, reflecting higher raw material, employee, and operating costs.
The company delivered a significant improvement in profitability. Profit before exceptional items and tax increased to ₹38.57 crore from ₹34.56 crore a year ago. Supported by an exceptional gain of ₹29.95 crore related to an insurance claim, profit before tax nearly doubled to ₹68.52 crore, compared with ₹36.67 crore in Q1 FY26. Net profit surged 77.8% year-on-year to ₹45.43 crore, while earnings per share (EPS) improved to ₹3.28, up from ₹1.85 in the same quarter last year, highlighting the company’s strong operational execution and improved profitability.
Flavour Business Continues to Outperform
The Flavour segment delivered robust growth across multiple geographies and emerged as one of the biggest contributors during the quarter.
Management clarified that part of the strong quarterly performance was due to customers advancing orders because of supply chain uncertainties. While quarterly numbers may normalize, the company remains optimistic about sustained growth in the segment.
Fragrance Business Shows Healthy Momentum
The Fragrance business continued to grow, particularly in Europe and other international markets.
Although the domestic fragrance segment remained relatively soft due to a high base and the company’s decision to exit certain low-margin businesses, management said demand fundamentals remain healthy.
The company is focusing on improving profitability by prioritizing quality business over volume.
Investments Continue Despite Global Uncertainty
S H Kelkar continues investing heavily in:
- Research & Development (R&D)
- Creative Development Centres (CDC)
- Manufacturing capacity expansion
- Global customer engagement
Management believes these investments will help the company win larger customer projects and strengthen its position in Europe, the UK, and the United States over the coming years.
Capacity Expansion Progress
The company shared updates on its ongoing expansion projects:
- European manufacturing expansion has been completed.
- The Vanvate manufacturing facility is expected to become operational during Q3 FY27.
- Additional investments in Indian manufacturing facilities are progressing as planned.
These expansions are expected to support future revenue growth and improve operational efficiency.
Debt Increased Due to Strategic Investments
Net debt increased by ₹65 crore during the quarter to ₹852 crore.
Management explained that the increase was driven by:
- Strategic inventory build-up to ensure uninterrupted customer supply
- Ongoing capital expenditure for expansion projects
The company expects debt levels to stabilize before gradually reducing over the medium term.
Insurance Claim Update
During Q1 FY27, S H Kelkar recognized approximately ₹30 crore as exceptional income related to an insurance claim arising from an earlier fire incident.
Management expects the remaining insurance claim to be settled during the current financial year.
FY27 Outlook Remains Positive
Despite ongoing geopolitical risks affecting energy prices, freight costs, and global trade, management remains optimistic.
The company expects:
- Double-digit revenue growth for FY27
- Continued improvement in operating margins
- Stable gross margins supported by strategic inventory planning
- Gradual improvement in return ratios as new investments begin contributing
Management also indicated that long-term growth opportunities remain significant, especially in international fragrance markets such as Europe, the UK, and the US.