As of Mar 28, 2026, S H Kelkar & Company Ltd (Chemicals - Others) has a deep value score of 51/100 (rated Average). Earnings are accelerating. 1Y return vs Nifty 500: -32%.
Deep value thesis based on recent earnings • Updated Mar 7, 2026
S H Kelkar is showing early signs of recovery with revenue growth accelerating to 7.5% YoY in Q3 FY26 (₹583.8 crore), PBT surging 79.2% YoY to ₹49 crore, and a dramatic 449.5% YoY improvement in 9M PBT to ₹97.8 crore, driven by margin recovery initiatives and strategic investments in global markets that could unlock value as operational efficiencies materialize.
Verdict
EARLY_INNINGS
Re-rating catalysts over the next 2-4 quarters • Updated Mar 7, 2026
Cost optimization initiatives expected to reverse 229 bps YoY margin compression, targeting OPM expansion to 12%+ by year-end
“Management commentary on financial discipline and working capital efficiency in Q3 earnings call”
Improved cash flows from operational turnaround expected to reduce D/E from current 0.67x to 0.5x within 6 months
“G CFO's statement on strengthening financial discipline and improving cash conversion”
Strategic US expansion expected to drive premium valuation as global footprint diversifies revenue base
Impact: +₹87.5 Cr revenue
“Management's focus on long-term strategy and global footprint expansion mentioned in Q3 results”
Risks that could prevent re-rating or deepen the value trap
Continued input cost inflation or pricing pressure in specialty chemicals sector
Impact: -200 bps margin impact
Management view: Management acknowledges margin pressures but believes cost optimization will reverse trend by Q4 FY26
Monitor: Quarterly OPM trend and input cost data
Further inventory buildup or receivables deterioration
Management view: Management focusing on working capital efficiency as stated in Q3 earnings call
Monitor: Operating cash flow to revenue ratio and DSO/DIO trends
Forward-looking targets from management for FY27
Revenue Growth Target
10%
Implied PAT Growth
35%
OPM Guidance
12%
Capex Plan
₹150 Cr
Key Milestones
• Margin recovery to 12%+ OPM by Q4 FY26
• US market contribution reaching 15% of revenue by Q2 FY27
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 AI-generated from publicly available financial data. This is educational research only — not investment advice. Last updated Mar 7, 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 51/100 (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 51/100 (Average). Monitor for improvement.
Other deep value stocks in Chemicals - Others
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 3 key growth catalysts identified from recent earnings analysis
S H Kelkar & Company Ltd has 2 key risks worth monitoring
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.
