Q1 2027 S H Kelkar and Company Ltd Earnings Call Transcript
Key Points
- Consolidated revenue grew 14% YoY to Rs. 662 crore, with strong growth in the fragrance segment led by Europe and select international markets.
- EBITDA increased 12% to Rs. 89 crore, with margin improving to 13.4% from 12.6% in the prior year quarter.
- Flavor segment delivered strong growth across geographies, with management expecting continued outperformance and a healthy baseline of ~95-96 crore per quarter.
- Gross margins remained stable YoY, supported by favorable product mix and proactive inventory planning, with six months of raw material visibility to mitigate cost pressures.
- Management is confident of achieving double-digit revenue growth and improved margins for the full year, with a clear path to deleveraging and a target of 15-20% ROC in the medium to long term.
- Exceptional income of ~Rs. 30 crore from insurance claim related to the parent plant was recognized, with an expected total settlement of Rs. 50-60 crore within the current fiscal year.
- Geopolitical developments in West Asia have kept energy, freight, and trade volatility high, creating an uncertain operating environment.
- The global ingredients business saw a softer quarter due to lower demand in select export markets, with recovery expected only in the second half of the year.
- Net debt increased by Rs. 65 crore during the quarter to Rs. 18 crore, reflecting strategic inventory buildup and capital deployment for capacity expansion.
- Domestic fragrance sales were flat YoY due to a high base and a conscious decision to exit low-margin businesses and hold back sales during price negotiations.
- The pace of revenue growth may vary across quarters due to timing of orders and geopolitical factors, with management cautious about predicting beyond two to three months.
- Higher operating expenses related to R&D and global CDC network investments are pressuring segment margins until revenue scales up.
Ladies and gentlemen, good day and welcome to the SHKLR & Company Limited Earnings Conference Call. As a reminder, all participant lines will remain in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal the operator by pressing *0 on your touch tone telephone.
Please note that this conference is being recorded. I will now hand the conference over to Mr. Meecha from CBL India for opening remarks. Thank you, and over to you.
Thank you Ryan. Good afternoon everyone and thank you for joining us on SH Clicker and Company Limited's Q1 FY207 earnings on this call. We have with us Mr. Kedar Ramesh Vaze, full-time director and group CEO.
Mr. B. Ramakrishnan, CEO, Fragrances Asia and USA, and Mr. Priti Kagarwal, Group Chief Financial Officer of the company. We will begin the call with a brief opening remarks from the management, following which we will open the quorum for a Q&A session. Before we begin, I'd
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