As of , S H Kelkar & Company Ltd (Chemicals - Others) has a deep value score of 49/100 (rated Average). Earnings are accelerating. 1Y return vs Nifty 500: -26%.
Based on Q3 FY26 earnings • Updated Apr 19, 2026
What: U.S. Revenue Target: $2.5 million
“During the quarter, our U.S. Creative Development Centre secured its first customer order, marking an important milestone in our entry into the world's largest Flavour and Fragrance market.”
What: EBITDA Margin Target: 17%
Impact: 400 bps expansion
“I see these are all operating leverage plus new factory coming on stream, which should benefit us as we look forward.”
What: Insurance Receivable: ₹100 crore
Impact: ₹100 crore debt reduction
“we are expecting in and around Rs. 100 crore, and we do not see a risk on that... we will get this money within 6 to 12 months.”
What: Market Opportunity: Midsized player gap
“IFF and Firmenich have undertaken large M&A transactions... and this gives opportunity for midsized and the next level of companies to grow into these markets.”
What: Patent Count: 25+ patents
“We have more than 25 patents in all these countries already with us... the first patents in the U.S., for example, are running out in 2030.”
Earnings deceleration risks from management commentary
Trigger: While dollar prices came down, rupee prices did not fall as much as expected.
Management view: Monitoring currency fluctuations; opex in INR may change but remains stable in dollar-euro terms.
Monitor: fx
Trigger: Time lag in passing through lower raw material costs as older, expensive inventory is still in the system.
Management view: Expect improvement from April onwards as lower-cost RM flows through.
Monitor: commodity
Trigger: True-up impact on social contributions and the New Labour Code in India.
Management view: Current quarter is representative of peak opex; no further large additions expected.
Monitor: labor
Trigger: Tariffs and geopolitical situations led to order postponements.
Management view: Business softness is viewed as a timing issue rather than a structural decline.
Monitor: geopolitical
Key quotes from recent conference calls
“Okay. So just from the outlook front, we are still guiding to 12% plus revenue growth for this year, right, on a full year basis? [Previous Revenue Growth guidance]”
“I think somewhere in the last con call, you mentioned that you will be maintaining an EBITDA margin of somewhere close to 15-odd percent. [Previous EBITDA Margin guidance]”
“our road plan is that by the end of next year, we should be able to win about $2 million, $2.5 million worth of business. [Initiative: Global Creative Development Centres (CDCs)]”
“While the dollar prices have come down, the rupee prices have not come down as much as we expected a few months ago. [Risk (fx): MEDIUM]”
Headline numbers from the latest earnings call
Revenue
₹1,718 crore
Why: Growth was driven by resilient demand in core categories and traction with existing and new customers despite a challenging environment.
Revenue growth was slightly softer during the quarter due to a subdued environment and slower ramp-up in certain product categories.
Other Highlights
• U.S. Creative Development Centre secured its first customer order during the quarter.
• Gross debt stands at approximately ₹800 crore.
• Insurance claim of around ₹100 crore expected to be settled in 6 to 12 months.
Sub-sector-specific signals from the latest concall — each with management's stated reason for the change
Gross Margin %
42.4%
Why: Impacted by high-cost inventory and currency headwinds in the Indian rupee business.
Fragrance EBIT Margin
8%
Why: Depressed due to heavy front-ended investments in creative centers outside India.
Flavour EBIT Margin
20-22%
Why: Flavours business has reached a steady state after previous investment cycles.
Europe Capacity Utilisation
90%
Why: High utilization has created bottlenecks, preventing aggressive growth.
India Current Capacity
20,000 tons
India Capacity Expansion Plan
9,000 tons
Why: Expansion planned for Q1 next year to support future growth.
Inventory Days
145-150 days
Why: High due to keeping inventory in multiple locations during the factory transition phase.
U.S. Annual Fixed Opex
$3.5 - $4 million
Why: Costs associated with the new Creative Fragrance centre and leased tolling facility.
Annual Insurance Surcharge
₹13 - ₹14 crore
Why: Additional premium charged by insurers following the fire incident.
ROCE Target (Steady State)
20%
Why: Targeted return once new initiatives reach a 3-year maturity phase.
Forward-looking targets from management for Next 2-3 years
Revenue Growth Target
12%
OPM Guidance
17%
Capex Plan
₹110 Cr
12% CAGR
REAFFIRMED
₹110 crore to ₹120 crore
Rebuilding Vashivali and Vanavate facilities and completing European expansion.
Guidance Changes
EBITDA Margin (Short-term): 15% → 13% (Adjusted)
Revenue, profit and margin growth rates
| Metric | YoY | 3Y CAGR | Trend |
|---|---|---|---|
| Revenue | +8% | +11% | Stable |
| PAT (Net Profit) | +83% | -21% | Stable |
| OPM | 9.0% | -300 bps | Volatile |
The above analysis is parsed from publicly available earnings call transcripts. This is educational research only — not investment advice. Last updated Apr 19, 2026.
Based on publicly available financial data. This is educational research, not investment advice.
S H Kelkar & Company Ltd has a deep value score of 49/100 (rated Average). This score is calculated from three components
S H Kelkar & Company Ltd's quarterly profit (PAT) growth trajectory
S H Kelkar & Company Ltd is underperforming the market despite improving earnings — this is the core deep value thesis
S H Kelkar & Company Ltd's earnings momentum is Accelerating — profit growth is speeding up.
S H Kelkar & Company Ltd's valuation metrics
S H Kelkar & Company Ltd's revenue and margin trends
S H Kelkar & Company Ltd's trailing twelve month (TTM) performance
S H Kelkar & Company Ltd key facts
S H Kelkar & Company Ltd shows limited deep value signals currently — score is 49/100 (Average). Monitor for improvement.
Chemicals - Others deep value sector overview
Deep value investing studies stocks that are underperforming the market despite showing improving fundamentals. The thesis is that the market has not yet recognized the earnings recovery, creating a potential valuation gap. It requires patience — recovery can take several quarters.
The deep value score (0-100) combines three factors:
- Earnings (0-40 pts): PAT growth across last 3 quarters, acceleration, and consecutive growth - Underperformance (0-35 pts): How much the stock trails Nifty 500 over 1Y, 6M, 3M (deeper underperformance = higher score) - Quality (0-25 pts): Revenue growth, margin trends, and valuation metrics (PEG, P/B)
Higher score indicates a stronger contrarian research signal.
S H Kelkar & Company Ltd has 5 key growth catalysts identified from recent earnings analysis
S H Kelkar & Company Ltd has 4 key risks worth monitoring
In Q3 FY26, S H Kelkar & Company Ltd's management highlighted
The above FAQs are generated from publicly available earnings data. This is educational research only. Sector Alpha is not SEBI registered and does not provide investment advice.
